Capital Markets Authority Board of Directors Decision No. (47) of 2014

The Capital Markets Authority issued Decision No. (47) of 2014 to permit licensed custodian banks to act as custodians for investment funds they manage directly, provided strict independence criteria are met. The regulation stipulates that this arrangement is only valid if neither the fund’s investment manager nor its management services company is affiliated with or subject to the bank’s actual control, particularly regarding capital ownership limits defined in Decision No. (88) of 2009. All existing investment funds must execute or implement the necessary compliance adjustments within six months of the decision’s enforcement date.

Board of Directors Secretariat

Capital Markets Authority Board of Directors Decision

No. (47) of 2014 dated 24/3/2014

Regarding the conditions for licensed custodian banks that themselves operate investment fund activities to act as custodian for those funds

Capital Markets Authority Board of Directors

Having reviewed the Capital Market Law issued by Law No. (95) of 1992, its executive regulations, and the decisions issued pursuant thereto;

And the Central Deposit and Registration of Securities Law issued by Law No. (93) of 2000, and its executive regulations;

And Law No. (10) of 2009 regarding the regulation of supervision over non-banking financial markets and instruments;

And Presidential Decree No. (191) of 2009 regarding the provisions governing the Egyptian Exchange and its financial affairs;

And Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Capital Markets Authority;

And Capital Markets Authority Board of Directors Decision No. (88) of 2009,

And the approval of the Authority's Board of Directors in its session held on 24/3/2014;

Decided

(Article One)

Licensed banks authorized by the Authority to conduct custodian activities and that themselves operate investment fund activities may act as custodian for those funds, provided that neither the investment manager nor the management services company is affiliated with the bank or subject to its actual control, in accordance with the following criteria:

If the bank's ownership in the issued capital of the management services company exceeds the percentage stipulated in Article (5) of Capital Markets Authority Board of Directors Decision No. (88) of 2009.

(Article Two)

Existing investment funds must execute or implement this decision in accordance with its provisions within six months from the date of its enforcement.

(Article Three)

This decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.

Chairman of the Board of Directors
Sherif Samy