Circular Letter No. 5 of 2022: Regulatory Framework for Non-Banking Financial Activities

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

2022 5

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

It is worth noting: The necessity for good knowledge of all administrative and technical skills and expertise required for the job holder, in addition to all the legislations mentioned below and related to each position.

Position | Regulations

First: Positions of companies operating in the capital market

• Capital Market Law No. 95 of 1992
• Chapters Six, Nine, Eleven, and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Central Depository and Registration of Securities and Financial Instruments Law No. 93 of 2000 and its Executive Regulations.
• Financial Soundness Standards issued by the Chairman of the Authority Decision No. (14) of 2007 and means of assessing and measuring associated risks.
• Authority Board Decision No. (67) of 2012 regarding dealing in shares within the same session.
• Authority Board Decision No. (67) of 2014 organizing the practice of brokerage and custody companies for margin purchase operations.
• Cairo Exchange Chairman Decision No. (156) of 2014 regarding the issuance of membership rules for the Egyptian Exchange.
• Authority Board Decision No. (74) of 2015 regarding the mechanism for dealing in securities the day after purchase +1T.
• Authority Board Decision No. (61) of 2017 regarding procedures to enhance the protection of accounts of dealers with companies operating in the securities field.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (94) of 2018 regarding rules and procedures for dealing in unlisted securities.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Authority Board Decision No. (2) of 2021 regarding anti-money laundering and counter-terrorism financing controls.
• Authority Chairman Decision No. (268) of 2019 regarding borrowing securities for the purpose of selling.
• Rules for listing, continuing listing, and delisting securities at the Exchange and their amendments.
• Guide to rules and procedures for trading at the Egyptian Exchange.
• Basics and trading system at the Exchange.
• Fundamentals of financial statement analysis and proficiency in understanding fair value reports (in case of a research unit).

Managing Director of Securities Brokerage Companies Internal Auditor Branch Managers "A" and "B"

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Capital Market Law No. 95 of 1992
• Central Depository and Registration of Securities and Financial Instruments Law No. 93 of 2000 and its Executive Regulations.
• Chapters Three and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Articles (Numbers 122-32-17) of the Executive Regulations of the Capital Market Law.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.

Managing Director of Companies Engaged in
Establishing Companies Issuing Securities or Increasing Their Capital "Holding".
And Internal Auditor

• Capital Market Law No. 95 of 1992
• Chapters Two and Chapter Two of Chapter Three, and Chapters Six, Nine, Eleven, and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Central Depository and Registration of Securities and Financial Instruments Law No. 93 of 2000 and its Executive Regulations.
• Authority Board Decision No. (67) of 2012 regarding dealing in shares within the same session.
• Authority Board Decision No. (67) of 2014 organizing the practice of brokerage and custody companies for margin purchase operations.
• Authority Board Decision No. (61) of 2017 regarding procedures to enhance the protection of accounts of dealers with companies operating in the securities field.
• Authority Board Decision No. (94) of 2018 regarding rules and procedures for dealing in unlisted securities.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.
• Authority Chairman Decision No. (268) of 2019 regarding borrowing securities for the purpose of selling.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Authority Board Decision No. (2) of 2021 regarding anti-money laundering and counter-terrorism financing controls.
• Rules for listing, continuing listing, and delisting securities at the Exchange
• Guide to rules and procedures for trading at the Egyptian Exchange.
• Fundamentals of financial statement analysis and proficiency in understanding fair value reports.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.

Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies And Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

Investment Fund Governance:

• Authority Board Decision No. (56) of 2018 regarding governance controls for forming the board of directors structure of investment funds taking the form of a joint-stock company.
• Authority Board Decision No. (125) of 2015 regarding expertise and competence standards for those managing companies operating in the securities field.

Real Estate Fund:

• Authority Board Decision No. (34) of 2014 regarding investment controls for real estate investment funds.

*In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.

Charitable Fund:

• Authority Board Decision No. (17) of 2016 regarding the conditions that must be met by the founders of the charitable fund company.
• Authority Board Decision No. (19) of 2016 regarding the social or charitable purposes to which profits and returns resulting from the investment of the charitable investment fund are distributed.
• Authority Board Decision No. (31) of 2018 regarding controls on trading and transferring ownership of charitable investment fund documents.
• Authority Board Decision No. (53) of 2019 regarding determining the types of funds that cannot be licensed as charitable investment funds.

*In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.

Index Funds:

• Authority Board Decision No. (39) of 2014 regarding the designation of market makers and investment managers in index funds.
• Authority Board Decision No. (38) of 2014 regarding controls on contracting with a single market maker for index funds.
• Authority Chairman Decision No. (218) of 2014 regarding organizing the work of traded index funds.
• Cairo Exchange Chairman Decision No. (133) of 2014 regarding rules for practicing the activity and dealing of market makers on traded index fund documents.
• Cairo Exchange Chairman Decision No. (134) of 2014 regarding regulatory rules for traded index funds.

*In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.

Private Equity Funds in Movable Securities:

• Authority Board Decision No. (98) of 2020 regarding controls on dealing of investment funds in movable securities (all non-banking financing activities).

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Authority Board Decision No. (71) of 2021 regarding controls on dealing of investment funds in metals as one of the movable securities.

*In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.

Private Equity Funds:

• Authority Chairman Decision No. (667) of 2020 regarding specialized private equity funds.

*In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.

Investment Funds Operating According to Islamic Sharia.

• Authority Board Decision No. (8) of 2014 regarding organizing the work of Sharia Supervisory Committees for financial products issued according to
  *In addition to all decisions mentioned regarding the Managing Director of Securities Portfolio and Investment Fund Formation and Management Companies and the Internal Auditor.
• Articles (17, 32, 121) of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Chapter One of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Chapters Eleven and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority decisions organizing Special Purpose Acquisition Companies (SPAC) and including specific rules in the listing and delisting rules of the Egyptian Exchange.
• Authority Board Decision No. (121) of 2017 regarding registration requirements for companies and entities wishing to list and offer their securities at the Egyptian Exchange and approving public and private offering prospectuses.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (48) of 2019 regarding public and private offering procedures.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Articles 4 to 9 of the Listing and Delisting Rules of the Egyptian Exchange.

Managing Director of Underwriting and Subscription Promotion Companies in Securities And Internal Auditor

• Article (123) of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Means of assessing and measuring associated risks.
• Fundamentals of financial statement analysis and proficiency in preparing fair value reports.

Managing Director of Venture Capital Companies And Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Application of Standard No. (47) regarding financial instruments.
• Authority decisions organizing Special Purpose Acquisition Companies (SPAC).
• Articles organizing Sukuk contained in the Capital Market Law No. 95 of 1992 and its Executive Regulations.
• Authority Board Decision No. (71) of 2009 regarding the list of international credit rating companies.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (55) of 2018 regarding controls and means of publication for companies that offered securities in a public offering or have securities listed at the Egyptian Exchange.
• Authority Board Decision No. (176) of 2018 regarding requirements for establishing and licensing securitization companies.
• Authority Board Decision No. (188) of 2018 regarding accounting standards for companies issuing Sukuk and beneficiary companies, and auditing standards that auditors must comply with.
• Authority Board Decision No. (42) of 2019 regarding controls for forming and membership requirements of Sharia Supervisory Committees for Sukuk issuances compliant with Islamic Sharia.
• Authority Board Decision No. (178) of 2018 regarding rules for issuing beneficiary entities from securitization financing programs for Sukuk.
• Authority Board Decision No. (50) of 2019 regarding organizing certain provisions related to Sukuk.
• Authority Board Decision No. (119) of 2020 regarding licensing controls for securitization companies to deal in more than one Sukuk issuance.
• Authority Board Decision No. (120) of 2020 regarding controls for listing, renewing, and delisting the independent party monitoring Sukuk issuances with the Authority.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Controls for listing bonds and other financing Sukuk at the Egyptian Exchange.

Managing Director of a Securitization Company
And Internal Auditor

• Authority Board Decision No. (1) of 2017 regarding the issuance of Egyptian Standards for Financial Valuation of Enterprises.
• Authority Board Decision No. (114) of 2018 regarding conditions and controls for listing financial consulting companies and licensed entities by the Authority to perform financial valuation and prepare fair value studies, and its amendment by Authority Board Decision No. (79) of 2019.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.

Managing Director of Financial Consulting Companies And Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Circular Letter No. (6) of 2020 regarding notifying the Authority immediately upon assigning licensed companies to perform financial valuation and fair value determination studies.
• Authority Board Decision No. (110) of 2020 amending Authority Board Decision No. (1) of 2017 regarding the issuance of Egyptian Standards for Financial Valuation of Enterprises.
• Fundamentals of financial statement analysis.
• Central Depository and Registration of Securities and Financial Instruments Law and its Executive Regulations.
• Authority Board Decision No. (67) of 2012 regarding dealing in shares within the same session.
• Authority Board Decision No. (67) of 2014 organizing the practice of brokerage and custody companies for margin purchase operations.
• Authority Board Decision No. (74) of 2015 regarding the mechanism for dealing in securities the day after purchase +1T.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.
• Authority Chairman Decision No. (268) of 2019 regarding borrowing securities for the purpose of selling.
• Authority Board Decision No. (2) of 2021 regarding anti-money laundering and counter-terrorism financing controls.
• Rules for listing and delisting securities at the Exchange.

Managing Director of Clearing and Settlement Companies in Securities Transactions And Internal Auditor

• Chapter Eight of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (21) of 2010 regarding basic standards for professional performance of companies operating in the field of valuation, classification, and ranking of securities
• Authority Board Decision No. (112) of 2019 regarding certain controls for valuation, classification, and ranking of securities for medium and small companies and projects.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.

Managing Director of Securities Valuation, Classification, and Ranking Companies And Internal Auditor

• Chapter Three of Chapter Three of the Capital Market Law No. 95 of 1992
• Chapter Ten of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (71) of 2009 regarding the list of international credit rating companies.
• Authority Board Decision No. (54) of 2014 regarding procedures for offering bond issuances in installments.
• Authority Board Decision No. (55) of 2014 regarding rules and procedures for transferring more than one securitized portfolio to a securitization company.
• Authority Board Decision No. (22) of 2016 regarding controls for issuing bonds secured by an independent portfolio of financial rights.

Managing Director of Securitization Companies
And Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Authority Board Decision No. (23) of 2016 regarding rules for issuing bonds and financing Sukuk that have not obtained a credit rating.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (55) of 2018 regarding controls and means of publication for companies that offered securities in a public offering or have securities listed at the Egyptian Exchange.
• Authority Board Decision No. (172) of 2018 regarding rules and procedures for issuing and offering short-term bonds.
• Authority Board Decision No. (82) of 2021 regarding organizing dealing in bonds listed at the Exchange within the same session "intraday".
• Authority Board Decision No. (145) of 2021 regarding conditions and procedures for public and private offerings of bonds.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Controls for listing bonds and other financing Sukuk at the Egyptian Exchange.
• Authority Board Decision No. (149) of 2018 regarding requirements for obtaining a license to practice direct investment activity.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Means of assessing and measuring associated risks.
• Fundamentals of financial statement analysis and proficiency in preparing fair value reports.
• Application of Standard No. (47) regarding financial instruments.

Managing Director of Direct Investment Companies And Internal Auditor

• Chapters Eleven and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Articles from (183) to Article (183 bis 13) of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (37) of 2014 regarding financial soundness standards for companies licensed to practice the activity of market maker.
• Authority Board Decision No. (38) of 2014 regarding controls on contracting with a single market maker for index funds.
• Authority Board Decision No. (39) of 2014 regarding the designation of market makers and investment managers in index funds.
• Cairo Exchange Chairman Decision No. (133) of 2014 regarding rules for practicing the activity and dealing of market makers on traded index fund documents.
• Cairo Exchange Chairman Decision No. (134) of 2014 regarding regulatory rules for traded index funds.
• Authority Chairman Decision No. (218) of 2014 regarding organizing the work of traded index funds.
• Authority Chairman Decision No. (265) of 2014 regarding conditions and procedures for licensing the practice of market maker activity for holding companies.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.

Managing Director of Market Maker
And Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Listing and Delisting Rules and trading system at the Exchange.
• Guide to rules and procedures for trading at the Egyptian Exchange.
• Chapter Two of Chapter Three of the Executive Regulations of the Capital Market Law regulating investment funds.
• Authority Board Decision No. (88) of 2009 regarding controls on the work of investment fund management service companies.
• Authority Board Decision No. (130) of 2014 regarding controls for evaluating investment fund management companies for net asset value and determining assets and securities that require the assistance of a specialized appraiser and independent financial advisor for evaluation.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Egyptian Accounting Standards.
• Fundamentals of financial statement analysis.

Managing Director of Investment Fund Management Services Companies And Internal Auditor

• Chapters Seven, Eleven, and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Decision No. 480 of 2002 regarding the related parties system.
• Authority Board Decision No. (56) of 2014 regarding the conditions and specifications required for practicing the activity of dealing, brokerage, and intermediation in bonds.
• Authority Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and rules for owning shares of companies in non-banking activities.
• Authority Board Decision No. (172) of 2018 regarding rules and procedures for issuing and offering short-term bonds.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.
• Authority Board Decision No. (100) of 2020 regarding corporate governance rules for companies operating in non-banking financial activities.
• Authority Board Decision No. (82) of 2021 regarding organizing dealing in bonds listed at the Exchange within the same session "intraday".
• Authority Board Decision No. (145) of 2021 regarding conditions and procedures for public and private offerings of bonds.
• Guide to rules and procedures for trading at the Egyptian Exchange.
• Fundamentals of bond pricing, yield calculation, trading strategies, and volatility.

Managing Director of Bond Intermediation Companies And Internal Auditor

• Capital Market Law No. 95 of 1992 and its Executive Regulations.
• Authority Decision No. (14) of 2007 regarding financial soundness rules for companies operating in the securities field.
• Proficiency in auditing and Egyptian accounting standards.
• Fundamentals of financial statement analysis.

Internal Auditor

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Capital Market Law No. 95 of 1992 and its Executive Regulations.
• Authority Decision No. (14) of 2007 regarding financial soundness rules for companies operating in the securities field.
• Egyptian Accounting Standards.
• Fundamentals of financial statement analysis.

Financial Manager

• Law No. (8) of 2002 regarding Anti-Money Laundering and Counter-Terrorism Financing and its Executive Regulations.
• Law No. (94) of 2015 regarding Counter-Terrorism.
• Law No. (8) of 2015 regarding organizing the lists of terrorist entities and terrorists.
• Law No. (22) of 2018 regarding organizing procedures for preservation, seizure, administration, and disposal of funds of terrorist groups and terrorists.
• Board of Directors Decision No. (2) of 2021 regarding supervisory controls in anti-money laundering and counter-terrorism financing for entities operating in non-banking financial activities.
• Customer Due Diligence procedures issued by the Anti-Money Laundering and Counter-Terrorism Financing Unit regarding customers of financial institutions subject to the supervision of the Financial Regulatory Authority.
• Guidelines on applying targeted financial sanctions and negative lists - issued by the Egyptian Anti-Money Laundering and Counter-Terrorism Financing Unit.
• Sectoral Risk Assessment Guide - issued by the Egyptian Anti-Money Laundering and Counter-Terrorism Financing Unit.
• Familiarity with recommendations and instructions issued by the Financial Action Task Force (FATF).

Anti-Money Laundering and Counter-Terrorism Financing Officer

• Capital Market Law No. 95 of 1992
• Chapters Six, Nine, Eleven, and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (67) of 2014 regarding organizing the practice of brokerage and custody companies for margin purchase operations.
• Authority Chairman Decision No. (268) of 2019 regarding borrowing securities for the purpose of selling.
• Application of Standard No. (47) regarding financial instruments.
• Financial Soundness Standards issued by the Chairman of the Authority Decision No. (14) of 2007
• How to calculate yield and risk for shares and investment portfolios.
• Means of assessing and measuring associated risks.

Risk Manager

• Chapters Six, Eleven, and Twelve of the Executive Regulations of the Capital Market Law No. 95 of 1992
• Authority Board Decision No. (67) of 2012 regarding dealing in shares within the same session.

Executor
And Account Manager

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Guide to rules and procedures for trading at the Egyptian Exchange.
• Rules for listing and delisting securities at the Exchange.
• Authority Board Decision No. (67) of 2014 organizing the practice of brokerage and custody companies for margin purchase operations.
• Authority Chairman Decision No. (268) of 2019 regarding borrowing securities for the purpose of selling.
• Authority Board Decision No. (74) of 2015 regarding the mechanism for dealing in securities the day after purchase +1T.
• Authority Board Decision No. (48) of 2019 regarding conditions and procedures for public and private offerings.
• Familiarity with developments in the Egyptian Exchange indices.

And Back Office Operations Manager

Second: Positions of Insurance Companies

• Insurance and Supervision Law in Egypt and its Executive Regulations.
• Authority Board of Directors decisions either for the insurance activity, insurance intermediation, or reinsurance.
• Authority Chairman decisions either for the insurance activity, insurance intermediation, or reinsurance.
• Circular letters, instructions, and regulatory controls issued either by the Chairman of the Authority, his deputy, or the competent departments.

Managing Director

• Insurance and Supervision Law in Egypt and its Executive Regulations.
• Authority Board of Directors decisions related to the insurance activity.
• Circular letters, instructions, and regulatory controls issued regarding underwriting operations.

Underwriting Officer

• Provisions organizing the principles and rules of compensation stipulated in the Insurance and Supervision Law in Egypt and its Executive Regulations.
• Authority Board of Directors decisions related to the insurance activity.
• Circular letters, instructions, and regulatory controls issued regarding compensation operations.

Compensation Officer

• Provisions organizing the principles and rules of insurance company investments stipulated in the Insurance and Supervision Law in Egypt and its Executive Regulations.
• Authority Board of Directors decisions related to investment operations and investment funds.
• Circular letters, instructions, and regulatory controls issued regarding investment operations.

Investment Officer

Table of Regulations Required for Key Positions in Companies Operating in Non-Banking Financial Activities

• Provisions organizing insurance intermediation stipulated in the Insurance and Supervision Law in Egypt and its Executive Regulations.
• Authority Board Decision No. (23) of 2014 regarding rules governing the practice of insurance intermediation activity.
• Authority Board Decision No. (114) of 2021 regarding controls for organizing the work of insurance intermediation companies and reinsurance intermediation.
• Authority Chairman decisions regarding insurance brokers' websites and advertising and publicity controls.
• Circular letters