Regulatory Alerts2019-01-01
Decision No. 113 of 2019 of the Board of Directors of the Capital Market Authority
The Capital Market Authority issued Decision No. 113 of 2019 to establish specific regulatory controls for companies exclusively engaged in evaluating, classifying, and rating securities of medium and small enterprises. The decision exempts these specialized firms from the general licensing and shareholding rules applicable to broader securities rating companies under Decision No. 53 of 2018, while permitting international credit rating entities to act as shareholders. Additionally, it mandates that these companies secure professional liability insurance commensurate with their operational scale and requires their Managing Directors to complete accredited training from the Financial Services Institute or an Authority-approved body.
Capital Market Authority
Decision No. 113 of 2019 of the Board of Directors of the Authority
Dated 28/8/2019
Regarding certain controls for companies engaged in the activity of evaluating, classifying, and rating securities of medium and small enterprises
Board of Directors of the Capital Market Authority
After reviewing the Capital Market Law issued by Law No. 95 of 1992,
and its subsequent amendments;
And Law No. 10 of 2009 regarding the regulation of supervision over markets and non-banking financial instruments;
And Presidential Decree No. 192 of 2009 issuing the Basic Statute of the Capital Market Authority;
And Decision No. 53 of 2018 of the Board of Directors of the Authority regarding the controls for granting and maintaining licenses and the rules for shares of companies operating in non-banking financial activities;
And the approval of the Board of Directors of the Authority in its session held on 28/8/2019;
Article One
The ruling concerning the securities rating, classification, and evaluation companies specified in Table (1) attached to Decision No. 53 of 2018 of the Board of Directors of the Authority mentioned above shall not apply to companies whose activity is limited to engaging in the evaluation, classification, and rating of securities of medium and small enterprises, and one of the shareholders of these companies may be an international specialized entity in the field of credit rating.
Article Two
Companies whose activity is limited to engaging in the evaluation, classification, and rating of securities of medium and small enterprises are required to issue a professional liability insurance policy according to the conditions set by the Authority, commensurate with the size and capacities of the liabilities arising from performing their duties. Furthermore, the Managing Director of these companies must complete a training course in the field of evaluation, classification, and rating of securities of medium and small enterprises from the Financial Services Institute or one of the entities accredited 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