Circular

No. (4) for the year 2014 dated 05/05/2014
Regarding the Purchase of Subscription Rights
For the Account of Brokerage Firm Clients

Article: Securities Brokerage Firms

In light of the Authority's mandate to work towards the safety and stability of non-banking financial markets, as stipulated in Article Four of Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments. And whereas the Authority has observed in several cases that purchasers of subscription rights were unaware of the nature of these rights. Therefore, the Authority emphasizes the necessity for securities brokerage firms, when executing or placing their clients' orders to purchase subscription rights, to comply with the following:

First: Informing the client about the nature of the subscription right and the forfeiture of purchased rights in case the client fails to dispose of them during their trading period, while clarifying the start and end dates during which these rights may be sold, as well as the forfeiture of subscription rights purchased (or part thereof) in case the client does not participate in the rights offering for the additional shares during the offering period.

Second: The client shall be informed through one of the following methods:

1. The client signing a declaration submitting the purchase request - once per security - confirming their awareness of the contents of Item First.
2. In case the client issues purchase orders via telephone, they shall be informed of the contents of Item First during the recorded phone call requesting the purchase of these rights.
3. In case the client issues purchase orders via the international information network (Internet), a message displaying the contents of Item First must appear on the company's electronic trading website.

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Hesham Ibrahim
Head of the Central Administration for the Affairs of the Authority's Presidency

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Headquarters: Smart Village, Building 15 - Unit 84 Km 28, Cairo/Alexandria Desert Road Giza Governorate, Postal Code: 12577 Telephone: 020 2557 0040 - Fax: 020 2557 0041 Email: info@efsa.gov.eg Website: www.efsa.gov.eg