Regulatory Alerts2020-01-01
Board of Directors Decision No. (69) of 2020 Amending Decision No. (191) of 2018 on Financial Solvency Standards for Licensed Financial Leasing Companies
The Financial Regulatory Authority of Egypt issued Decision No. 69 of 2020 to amend the financial solvency standards for licensed financial leasing companies. The amendment grants these companies a three-year compliance grace period regarding concentration ratio limits and general provision requirements, while mandating quarterly progress reports to the Authority. Additionally, the revised standards allow a phased implementation of the general provision ratio, scaling from 50% to 100% over three years based on the 2019 financial statements, subject to Egyptian Accounting Standards.
FINANCIAL REGULATORY AUTHORITY FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Decision of the Financial Regulatory Authority No. (69) for the year 2020 dated 22/4/2020 Amending the Authority's Board of Directors Decision No. (191) for the year 2018 Regarding the Financial Solvency Standards for Companies Licensed to Conduct Financial Leasing Activities
The Board of Directors of the Financial Regulatory Authority Having reviewed Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; And Law No. (176) of 2018 organizing the activities of financial leasing and factoring; And Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Financial Regulatory Authority; And the Authority's Board of Directors Decision No. (191) of 2018 regarding the financial solvency standards for companies licensed to conduct financial leasing activities; And having approved the Authority's Board of Directors at its meeting held on 22/4/2020.
Decided
(Article One)
The provisions of Articles (2 - last paragraph, 5 - last paragraph, 6 - second paragraph of item first) of the financial solvency standards for companies licensed to conduct financial leasing activities attached to the Authority's Board of Directors Decision No. (191) of 2018 referenced above are replaced with the following provisions:
Article (2 - last paragraph): The Company is granted a grace period of three years from the effective date of this Decision to comply with the provisions of this Article, while committing to not conclude new transactions that would exceed the maximum legal concentration ratio during this period, and the Company shall also commit to providing the Authority with quarterly reports on the measures taken in this regard.
Article (5 - last paragraph): The Company is granted a grace period of three years from the effective date of this Decision to comply with the provisions of this Article, and the Company shall commit to providing the Authority with quarterly reports on the measures taken in this regard.
Article (6, Item First, Second Paragraph): The Company may apply the general provision ratio mentioned herein gradually at a rate starting at (50%), then (75%), reaching a rate of (100%) within a maximum of three years from the date of the financial statements for the period ending on 31/12/2019, to be treated in accordance with Egyptian Accounting Standards.
(Article Two) This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall be enforced from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors of the Authority Dr. Mohamed Omran
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