Financial Regulatory Authority

Financial Regulatory Authority

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Chairman of the Authority

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Decision of the Board of Directors of the Financial Regulatory Authority

No. (106) for the year 2018 dated 16/7/2018

Regarding the conditions for registration, renewal, and deletion of founding agents for companies operating in non-banking financial activities in the register of the Financial Regulatory Authority

The Board of Directors of the Financial Regulatory Authority, Having reviewed Law No. (1) of 1981 regarding supervision and control of insurance in Egypt and its Executive Regulations; Law No. (159) of 1981 regarding joint stock companies, limited partnerships by shares, and limited liability companies and its Executive Regulations; Capital Market Law No. (95) of 1992 and its Executive Regulations and decisions issued pursuant thereto; Financial Leasing Law No. (95) of 1995 and its Executive Regulations; Law No. (93) of 2000 issuing the Central Depository and Registration Law for Securities and its Executive Regulations; Real Estate Financing Law No. (148) of 2001 and its Executive Regulations; Anti-Money Laundering Law No. (80) of 2002 and its Executive Regulations; Law No. (10) of 2009 regulating supervision on non-banking financial markets and instruments; Law No. (141) of 2014 regulating microfinance activities; Presidential Decree No. (191) of 2009 regarding the rules governing the Egyptian Exchange and its financial affairs; The Basic Statute of the Financial Regulatory Authority issued by Presidential Decree No. (192) of 2009; Board Decision No. (72) of 2013 regarding regulatory and supervisory conditions for factoring activities and its amendments; Board Decision No. (11) of 2014 regarding rules for registration and deletion of securities on the Egyptian Exchange and its amendments; Board Decision No. (135) of 2016 regarding conditions for acquiring or controlling share brokerage companies and investment fund companies and rules for signing arrangements pursuant to Articles (328, 328 bis, 328 ter) of the Capital Market Law Executive Regulations; Board Decision No. (65) of 2017 regarding conditions for owning shares of companies operating in the securities field; Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and share ownership rules for companies operating in non-banking financial activities; and upon approval by the Board of Directors in its session held on 16/7/2018.

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Has Decided

(Article One)

The provisions of this Decision shall apply regarding the conditions for registration, renewal, and deletion of founding agents for companies operating in non-banking financial activities in the register of the Financial Regulatory Authority.

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(Article Two)

Non-banking financial activities through which founding agents interact with the Authority during establishment and licensing procedures for companies

A. Activities of companies operating in the capital market:

1. Promotion and mobilization of securities subscriptions
2. Participation in establishing companies issuing securities or increasing their capital
3. Venture capital
4. Clearing and settlement of securities transactions
5. Formation and management of securities portfolios
6. Investment funds
7. Management of investment funds
8. Securities brokerage
9. Dealing, intermediation, and brokerage in bonds
10. Supply of financial rights
11. Financial advisory services for securities
12. Market maker
13. Management services in the field of investment funds
14. Valuation, classification, and rating of securities.
15. Publication of information about securities.
16. Valuation and analysis of securities.
17. Auditing
18. Direct investment companies
    In addition to activities for which a decision is issued by the competent Minister after approval by the Board of Directors to add them in this regard.

B. Activities of companies operating in the insurance sector:

1. Insurance and reinsurance.
2. Intermediation in insurance and reinsurance.
3. Insurance advisory expertise.
4. Survey and damage assessment expertise.

C. Activities of companies operating in the financing sector:

1. Real estate financing and re-financing.
2. Real estate intermediation.
3. Real estate valuation.

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(Article Three)

A dedicated register shall be established by the Financial Regulatory Authority for the registration and renewal of registration of agents who represent founding agents for companies operating in non-banking financial activities in completing the procedures for submitting documents for all stages of establishment and licensing and other transactions before the Authority, and submitting requests on the approved form with tracking numbers according to the date of receipt of each, and each request shall have a dedicated file in which all related documents and data are deposited.

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(Article Four)

Key duties of founding agents

Without prejudice to the competencies specified in the agency contract for the agent, the founding agent shall perform the following acts before the Authority:

• Drafting the company contract and its amendments.
• Submitting all documents, data, certificates, and any other documents deemed necessary by the Authority.
• Interacting with the Financial Regulatory Authority on all matters related to establishment and licensing procedures.

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(Article Five)

Conditions for registration in the founding agents register

The following conditions must be met for registration in the aforementioned register:

Formal Conditions:

• Submitting a registration request on the approved form accompanied by the following documents and data:
  • A copy of the national ID card.
  • A copy of the academic qualification certificate certified by the Faculty of Law, Faculty of Commerce, Faculty of Economics and Political Sciences, or any other suitable qualifications.
  • Possession of Egyptian nationality and residence in the Arab Republic of Egypt.
  • Possession of civil capacity.
  • Good conduct and reputation.
  • Original criminal record certificate.
  • Certificate or decision confirming no bankruptcy declaration judgments have been issued.

Substantive Conditions:

• Not being an employee at the time of submitting the registration request in any government entity or public authority.
• Not having previously worked for the Financial Regulatory Authority unless at least three years have elapsed since termination before submitting the registration request.
• A certified certificate confirming the applicant's registration in the table of practicing lawyers (First Instance – Exceptional – Cassation) or the Chamber of Commercial Agents in the table of accountants (Free Practice Chamber for Accounting and Auditing – etc.) or a certificate from the relevant syndicate according to the applicant's qualification.
• A certified certificate from the syndicate confirming that no disciplinary judgments have been issued against the applicant.
• The founding agent for companies operating in non-banking financial activities may be a natural person or a legal entity.

Professional Competence and Suitability Conditions:

• Possessing experience in the field of company establishment.
• Listing the members of the supporting work team, their qualifications and experience, and their criminal record certificates.

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(Article Six)

Registration procedures in the founding agents register

• The competent department within the Authority shall study and examine registration, suspension, and deletion requests for founding agents in the aforementioned register, and prepare a detailed memorandum with the department's opinion for presentation to the committee formed within the Authority for this purpose.
• Registration requests shall be referred to the competent committee to examine registration, renewal, and suspension requests, and its decision shall be issued by majority vote within fifteen days from the date of document completion. The Authority shall issue its decision on the request within sixty days at most from the date of submitting complete documents. In case of rejection, it must be reasoned, and the applicant has the right to appeal the Authority's decision within ten days from the date of notification.

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(Article Seven)

Duration of Registration

• The applicant shall be registered in the aforementioned register for a period of three years pursuant to a decision issued by the Chairman of the Authority, and renewal for one or more similar periods is permitted provided that a renewal request is submitted at least one month before the expiration of the registration period.

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(Article Eight)

Registration and Renewal Fees

• The applicant shall pay a fee of (10,000) Egyptian pounds for the registration or renewal request in the aforementioned register.
• Those registered in the founding agents register for this purpose with the Authority are committed to submitting a periodic semi-annual report on the conduct of the activity.

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(Article Nine)

Prohibited Acts

The founding agent, including members of the work team, is prohibited from:

• Having any type of direct or indirect interest in the companies they are establishing.
• Registering incomplete or false data in the registration or renewal request.
• Performing any acts or transactions that contradict the assigned task and aim to increase commissions, expenses, or fees, or to achieve profit or advantage for themselves or any of their employees.
• Publishing incorrect, incomplete, inaccurate data or information, or withholding fundamental information or data.
• Acts or transactions that may lead to controlling a specific type of companies operating in non-banking financial activities.

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(Article Ten)

Cases for Suspension of Registration in the Register

The Chairman of the Authority may issue, based on a recommendation from the committee formed for registration and renewal requests, a decision to suspend the registration of one of the registered persons for a period not exceeding six months, renewable for other periods, in the following circumstances:

• The institution of criminal proceedings against him by the Authority regarding alleged incidents.
• The establishment of multiple errors in any data or documents at any stage of his work on the request.

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(Article Eleven)

Cases for Deletion from the Register

The Chairman of the Authority may issue a decision to delete the registration based on a recommendation from the committee formed for registration and renewal requests in the following circumstances:

• Failure to complete registration renewal procedures.
• If a registration condition is lost and not fulfilled within one month from the date of notification by the Authority.
• Issuance of a judicial or disciplinary judgment for a crime involving honor or trust, or a criminal offense.

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(Article Twelve)

Legal Liability

Any condition or agreement exempting the founding agent or the work team from legal accountability for acts, actions, or behavior contrary to the provisions of laws, regulations, and decisions governing companies operating in non-banking financial activities shall be considered null and void.

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(Article Thirteen)

Deadline for Signing Arrangements

Founding agents for companies operating in non-banking financial activities shall submit to the Authority to take procedures for signing their arrangements within a maximum period of six months from the date of implementation of this Decision.

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(Article Fourteen)

This Decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.

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Chairman of the Board of Directors of the Authority Dr. Mohamed Omran 46046076

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Smart Village, Building no. B-136, Giza
Postal Code: 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036 www.FRA.gov.eg

Smart Village, Building No. 136, B, Giza, Egypt Postal Code: 12577 Telephone: +202 35345350 - Fax: +202 35370036 info@fra.gov.eg