Decision of the Board of Directors of the Financial Regulatory Authority

No. (106) of 2018 dated 16/7/2018

Regarding the Conditions for Registration, Renewal, and Deletion of Agents for Founders of Companies Operating in Non-Banking Financial Activities in the Register of the Financial Regulatory Authority

Board of Directors of the Financial Regulatory Authority

After reviewing Law No. (10) of 1981 regarding Supervision and Control of Insurance in Egypt and its Executive Regulations; and the Joint Stock Companies, Limited Partnerships by Shares, and Limited Liability Companies Law issued by Law No. (159) of 1981 and its Executive Regulations; and the Capital Markets Law issued by Law No. (95) of 1992 and its Executive Regulations and implementing decisions; and the Financial Leasing Law issued by Law No. (95) of 1995 and its Executive Regulations; and Law No. (93) of 2000 issuing the Central Depository and Registration of Securities Law and its Executive Regulations; and the Real Estate Financing Law issued by Law No. (148) of 2001 and its Executive Regulations; and the Anti-Money Laundering Law issued by Law No. (80) of 2002 and its Executive Regulations; and Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; and Law No. (141) of 2014 regulating microfinance activities; and Presidential Decree No. (191) of 2009 on the provisions organizing the Egyptian Exchange and its financial affairs; and the Statute of the Financial Regulatory Authority issued by Presidential Decree No. (192) of 2009; and FRA Board Decision No. (72) of 2013 regarding regulatory and supervisory conditions for factoring activities and its amendments; and FRA Board Decision No. (11) of 2014 regarding rules for registration and deletion of securities agents at the Egyptian Exchange and its amendments; and FRA Board Decision No. (135) of 2016 regarding conditions for acquiring or controlling securities brokerage companies and investment fund management companies, and documentation rules per Articles 378 and 378-bis of the Capital Market Law Executive Regulations; and Board Decision No. (65) of 2017 regarding conditions for shareholding in securities companies; and Board Decision No. (53) of 2018 regarding licensing conditions, continuity, and shareholding rules for companies operating in non-banking financial activities; and upon approval by the FRA Board of Directors in its session held on 16/7/2018.

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(Article One)

The provisions of this Decision shall apply regarding the conditions for registration, renewal, and deletion of agents for founders of 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 Founders' Agents Interact with the Authority during Company Establishment and Licensing Procedures

A. Activities of Companies Operating in the Capital Market Sector:

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. Investment fund management.
8. Securities brokerage.
9. Dealing and brokerage in bonds.
10. Financial rights trading.
11. Securities financial advisory services.
12. Market maker.
13. Management services in the field of investment funds.
14. Securities valuation, classification, and ranking.
15. Publication of securities information.
16. Securities valuation and analysis.
17. Rating.
18. Direct investment companies.

In addition to activities for which a decision is issued by the competent Minister following approval by the Board of Directors of the Authority to add them in this regard.

B. Activities of Companies Operating in the Insurance Sector:

1. Insurance and reinsurance.
2. Insurance and reinsurance brokerage.
3. Insurance consulting expertise.
4. Survey and damage assessment expertise.

C. Activities of Companies Operating in the Financing Sector:

1. Real estate financing and refinancing.
2. Real estate brokerage.
3. Real estate valuation.

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(Article Three)

A special register shall be established by the Financial Regulatory Authority for the registration and renewal of agents representing founders of companies operating in non-banking financial activities, to conclude document submission procedures for all establishment and licensing stage procedures and other transactions before the Authority. Applications shall be submitted on the approved form with tracking numbers according to the date of receipt of each, and each application shall have a dedicated file in which all related documents and data are deposited.

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(Article Four)

Key Duties of Founders' Agents

Without prejudice to the authorities specified in the power of attorney contract for the agent, the founders' agent shall perform the following acts before the Authority:

• Drafting the company contract draft and incorporating amendments thereto.
• Submitting all documents, data, certificates, and any other documents deemed necessary by the Authority.
• Interacting with the Financial Regulatory Authority regarding establishment and licensing procedures.

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(Article Five)

Conditions for Registration in the Founders' Agents Register

Registration in the aforementioned register requires meeting the following conditions:

Formal Conditions:

• Submission of the 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 Science, 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 declaration confirming no bankruptcy declaration judgments have been issued against them.

Substantive Conditions:

• Not being an employee at the time of submitting the registration request with any government entity or public authority.
• Not having previously worked for the Financial Regulatory Authority for at least three years prior to submitting the registration request.
• A certified certificate confirming the applicant's registration in the roll of practitioners at the Lawyers' Syndicate (Primary - Appeals - Judiciary) or the Merchants' Syndicate in the accountants' roll (Free Practice Branch for Accounting and Auditing, etc.), or a certificate from the syndicate to which the applicant belongs according to their qualification.
• A certified certificate from the syndicate of residence confirming that no disciplinary judgments have been issued against them.
• The agent for founders of companies operating in non-banking financial activities may be a natural person or a legal entity.

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(Article Six)

Procedures for Registration in the Founders' Agents Register

• The competent department within the Authority shall study and examine requests for registration and suspension of deletion for founders' agents in the aforementioned register, and prepare a memo reflecting the department's opinion for presentation to the committee formed within the Authority for this purpose to rule on the request.
• Registration requests shall be referred to the department responsible for examining 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 ruling on the request within a minimum period from the date of submitting complete documents. In case of rejection, the decision 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 register for a period of three years pursuant to a decision issued by the Chairman of the Authority. Renewal shall be for a similar period or periods, provided that the 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 an amount of (10,000) Egyptian pounds for the registration or renewal request in the designated register.
• Those registered in the founders' agents register are committed to paying this rate annually for practicing the activity.

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(Article Nine)

Prohibited Acts

The founders' agent, including team members, is prohibited from the following acts:

• 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 not governed by the assigned task and aimed at increasing commissions, expenses, or benefiting or achieving profit or advantage for themselves or any of their colleagues.
• Publishing incorrect, incomplete, unverified data or information, or withholding material information or data.
• Acts or transactions that may lead to controlling a specific type of company 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 a registered agent for a period not exceeding six months, renewable for other periods, in the following circumstances:

• Filing of a criminal lawsuit against them by the Authority regarding alleged incidents.
• Proof of multiple errors in any data or documents at any stage of the application process.

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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 renewal procedures.
• If a registration condition is lost and the agent fails to fulfill it within one month from the date of notification by the Authority.
• Issuance of a judicial or disciplinary judgment for a crime involving honor, trust, or a criminal offense.

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(Article Twelve)

Legal Liability

Any clause or agreement exempting founders or their agents 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 void.

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(Article Thirteen)

Compliance Period

Founders' agents of companies operating in non-banking financial activities must submit to the Authority to take compliance procedures 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
Dr. Mohamed Omran

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Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY

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

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