Board of Directors Secretariat

Decision No. 53 of 2014

Dated 13/4/2014
Regarding the Standards for Documenting the Status of Investment Funds

Board of Directors of the General Authority for Financial Supervision

After reviewing the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations, and the decisions issued pursuant to them;

And the Central Depository and Registration of Securities Law issued by Law No. (93) of 2000 and its Executive Regulations;

And Law No. (10) of 2009 regarding the regulation of supervision over non-banking financial markets and instruments;

And Presidential Decree No. (191) of 2009 regarding the provisions organizing the Egyptian Exchange and its financial affairs;

And Presidential Decree No. (192) of 2009 issuing the Basic Statute of the General Authority for Financial Supervision;

And the approval of the Authority's Board of Directors at its meeting held on 13/4/2014;

It has been decided

(Article One)

All existing investment funds are required to appoint a management services company licensed by the Authority to conduct this activity, which shall undertake the tasks specified in Chapter Two of Part Three of the Executive Regulations of the Capital Market Law, by no later than 26/8/2014.

The board of directors of the investment fund company (or the supervisory committee for the investment fund's operations for banks and insurance companies that conduct the investment fund activity themselves) shall contract with the management services company and determine its fees, which shall be deducted from the fees of the entity undertaking the tasks delegated to the management services company.

(Article Two)

Except for the investment fund activity conducted by banks and insurance companies themselves, joint stock companies issuing existing investment funds are required to ensure that each investment fund takes the form of a joint stock company, and in the event that more than one investment fund is issued by the issuing company, each fund must take the form of a joint stock company, by no later than 26/7/2015, all subject to the following:

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(Article Three)

All existing investment funds are required to take steps to amend the prospectus or information memorandum, as applicable, by no later than 26/7/2015, subject to the following:

1. The legal representative of the joint stock company issuing the investment fund shall convene a general assembly meeting of the company to address the following:

• Approval of amendments to the fund company's articles of association, which shall include how to determine the board members' share of distributable profits, taking into account the fund's financing structure.
• Approval of the formation of the fund company's board of directors.
• Approval of the central financial monitoring list and the auditor's report.

2. Register the amendments made to the fund company's articles of association in the commercial register after submitting to the Authority the decisions adopted in accordance with the preceding items and obtaining their ratification.

3. Submit a proposal to the Authority to amend the prospectus or information memorandum, as applicable, in accordance with the above. The Authority shall review the amendment, ensure its compliance with the provisions of the Capital Market Law and its Executive Regulations, address the Authority's comments (if any), and grant preliminary approval to complete the procedures for approving the amendment to the prospectus or information memorandum, as applicable.

4. A meeting of the Assembly of Document Holders shall be convened to consider the following:

• Amending the fund's investment policy and redefining the fees, obligations, and powers of the fund's service providers, along with other required amendments to the prospectus or information memorandum, as applicable, in accordance with the provisions of Chapter Two of Part Three of the Executive Regulations of the Capital Market Law.
• The method for determining distributable profits and the share of document holders in exchange for their contribution to the fund company's share capital, as well as other document holders, and the share of the company's board members from distributable profits, all taking into account the fund's financing structure.

5. Any other amendments to the prospectus or information memorandum must be presented to the Assembly of Document Holders in accordance with the provisions of Article (164) of the Executive Regulations of the Capital Market Law.

The assembly's resolutions shall be passed by a two-thirds majority of the documents present, and these resolutions shall not take effect until ratified by the Authority.

(Article Four)

The competent authority for existing funds is required to obtain the Authority's approval within the period specified in Article (183 bis 25) of the Executive Regulations of the Capital Market Law, in accordance with the timeline for harmonizing the status as per the standards and deadlines set forth in this Decision.

(Article Five)

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

Sherif Samy

General Authority for Financial Supervision
Office of the Chairman

46076