Circular Letter No. (8) of 2014

Dated 19/8/2014

Regarding the Trading of Treasury Shares for Companies Listed on the Egyptian Exchange

In light of Article (48) of Law No. (159) of 1981, which stipulates that a company must dispose of any portion of its shares acquired by any means to third parties within a maximum period of one year from the date of acquisition, failing which it must reduce its capital by the nominal value of those shares and follow the prescribed procedures for doing so. It is permissible for a company to purchase some of its shares to distribute to its employees as part of their profit share.

Therefore: The Authority wishes to emphasize the obligation of the aforementioned companies, when trading treasury shares, to comply with the legal requirement that the disposal of treasury shares to third parties must occur within a maximum of one year from the date of acquisition, as follows:

1. Disposing of these shares to a subsidiary company or a company under its actual control does not constitute disposal to third parties.

2. In the event that the company's shares are purchased through a subsidiary or a company under its actual control, these shares must complete the holding period mentioned above and must be disposed of within this period. These shares shall not have voting rights at the general assembly meetings of the parent company, nor shall these shares be converted into Global Depositary Receipts (GDRs) in accordance with the rules approved by the Authority.

The Egyptian Exchange is required to ensure the implementation of the provisions contained in this Circular, publish them on trading screens and its website, and observe all treasury share trading regulations stipulated in the Securities Listing and Delisting Rules during trading procedures for these shares.

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Khaled Kattar
Deputy Chairman of the Authority

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Egyptian Financial Supervisory Authority
Egyptian Financial Supervisory Authority

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Telephone: (+202) 25770040
Fax: (+202) 25245322
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg

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