Regulatory Alerts2020-01-01
FRA Board Decision No. 48 of 2020 Amending Decision No. 58 of 2018 on Licensing Rules for Banks and Non-Banking Financial Firms to Conduct Investment Fund Activities
The Financial Regulatory Authority (FRA) issued Board Decision No. 48 of 2020 to amend Decision No. 58 of 2018 governing licensing rules for banks and non-banking financial companies conducting investment fund activities. The amendment requires each fund to function as an independent financial entity audited by two mutually independent, FRA-registered auditors who must issue joint reports explicitly outlining any professional disagreements. Additionally, the decision prohibits any single auditor from simultaneously auditing more than three funds to mitigate conflicts of interest, with the regulation becoming effective the day after its official publication.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Decision of the Board of Directors of the Financial Regulatory Authority
No. (48) of 2020 dated 2020/3/22 Regarding the Amendment of Board Decision No. (58) of 2018 Concerning the Rules, Regulations, and Licensing Procedures for Banks and Certain Non-Banking Financial Companies to Conduct Investment Fund Activities Independently or Jointly
Board of Directors of the Financial Regulatory Authority
Having reviewed the Capital Market Law No. (95) of 1992 and its Executive Regulations; and Law No. (10) of 2009 Regulating Supervision over Non-Banking Financial Markets and Instruments; and Presidential Decision No. (192) of 2009 Issuing the Basic Statute of the Financial Regulatory Authority; and Board Decision No. (58) of 2018 Concerning the Rules, Regulations, and Licensing Procedures for Banks and Certain Non-Banking Financial Companies to Conduct Investment Fund Activities Independently or Jointly; and the approval of the Authority's Board of Directors in its meeting held on 2020/3/22;
Decided
(Article One)
Item (7) of Article Seven of Board Decision No. (58) of 2018 Concerning the Rules, Regulations and Licensing Procedures for Banks and Certain Non-Banking Financial Companies to Conduct Investment Fund Activities Independently or Jointly, is replaced with the following:
Article Seven – Item 7
- The fund shall constitute an independent financial entity in accordance with Egyptian accounting standards and in a manner that ensures, given the nature of its activity, that the fund's accounts are audited by two auditors selected from those registered in the relevant registry maintained by the Authority, provided that they are independent of each other and independent of the investment manager and any related parties to the fund. Each fund auditor shall have access to the fund's books, the right to request data and clarifications, and the authority to verify assets. The auditor shall comply with Egyptian auditing standards and prepare a report on the audit results.
(Article Two)
The auditors shall issue a joint report, and in case of disagreement between them, the report shall specify the points of disagreement and each auditor's viewpoint.
In all cases, a single auditor shall not audit the accounts of more than three funds simultaneously, taking into account the avoidance of conflicts of interest as stipulated in the prospectus or information memorandum, as applicable.
(Article Three)
This Decision shall be published in the Egyptian Gazette, on the Authority's website, and on the Egyptian Exchange website, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors Dr. Mohamed Omran
Smart Village, Building 136, Giza, Egypt Postal Code: 110 Telephone: +202 35745350 Fax: +202 35700036 WWW.FRA.GOV.EG
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