Board of Directors Decision No. (25) of 2021

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority
Board of Directors Decision No. (25) of 2021 dated 2021/2/28 Amending certain provisions of the Authority's Board of Directors Decision No. (163) of 2018 Regarding the Executive Regulations for Conducting Factoring Activities

Board of Directors of the Financial Regulatory Authority Having reviewed the Civil Code; And Law No. (10) of 2009 on Regulating Supervision of Non-Banking Financial Markets and Instruments; And Law No. (176) of 2018 on Regulating Leasing and Factoring Activities; And Authority's Board of Directors Decision No. (72) of 2013 on Regulatory and Supervisory Controls for Factoring Activities; And Authority's Board of Directors Decision No. (137) of 2018 on Licensing and Renewal Controls for Leasing and Factoring Companies; And Authority's Board of Directors Decision No. (163) of 2018 on the Executive Regulations for Conducting Factoring Activities; And the Memorandum prepared by the Non-Banking Finance Supervision and Regulation Sector dated 2021/2/23; And after approval by the Authority's Council in its session held on 2021/2/28;

Decided

(Article One)
The text of Article Three of the Authority's Board of Directors Decision No. (163) of 2018 on the Executive Regulations for Conducting Factoring Activities is hereby replaced with the following:
Conditions to be Met by the Debtor
The debtor must be a merchant, and sufficient commercial data must be available regarding them. The debtor may also be a public legal entity or among investors in margin trading operations at the Egyptian Exchange, in accordance with conditions approved by the Authority. The debtor may also be an end consumer in accordance with the controls stipulated in Article Seven of this Decision.

Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority
(Article Two)
Article Four (bis) is hereby added to the Authority's Board of Directors Decision No. (163) of 2018 on the Executive Regulations for Conducting Factoring Activities as follows:
Obligations and Conditions to be Met by Factoring Companies for Factoring Financial Rights Arising from Margin Trading Operations:
1- Compliance with the provisions of Chapter Three (specific to factoring activities) of Law No. (176) of 2018 on Regulating Leasing and Factoring Activities, and Authority's Board of Directors Decision No. (163) of 2018 on the Executive Regulations for Conducting Factoring Activities. 2- The brokerage firms contracted with the factoring company must be among those approved by the Authority to conduct margin trading operations, with compliance in conducting such operations according to the provisions of Chapter Nine of the Executive Regulations of the Capital Market Law No. (95) of 1992, which regulates securities margin purchase operations, and Authority's Board of Directors Decision No. (67) of 2014 on Regulating the Conduct of Brokerage and Custody Companies for Securities Margin Purchase Operations. 3- The securities subject to margin purchase must be among those specified by the Exchange in accordance with the standards for conducting specialized activities (including securities margin purchase) issued by the Egyptian Exchange Management and approved by the Authority. 4- Factoring companies must establish an integrated system for conducting the activity of factoring financial rights arising from securities margin purchase activities, including rules for conducting this activity, and a model contract for conducting this activity with the brokerage firm containing the rights and obligations of both parties, in accordance with the model contract issued by the Authority.

(Article Three)
This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the day following its publication in the Egyptian Gazette.

Chairman of the Board of Directors of the Authority Dr. Mohamed Omran

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