Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

---

Decision of the Board of Directors of the Financial Regulatory Authority

No. (56) of 2018 dated 26/04/2018

Regarding the regulations for forming the board of directors structure of investment funds structured as joint stock companies

---

Board of Directors of the Financial Regulatory Authority

After reviewing the Capital Market Law issued by Law No. (95) of 1997 and its executive regulations and the decisions issued in implementation thereof;

And the Central Depository and Registry of Securities Law issued by Law No. (93) of 2000 and its executive regulations;

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

And the Statutes of the Financial Regulatory Authority issued by Presidential Decree No. (192) of 2009;

And the Board of Directors Decision No. (107) of 2016 regarding corporate governance rules for companies operating in the securities field;

And the memo returned from the competent administration at the Authority dated 19/04/2018;

And the Board of Directors Decision No. (125) of 2015 dated 16/12/2015 and its amendments;

And the approval of the Board of Directors at its meeting held on 26/04/2018.

---

Decided

(Article One)

The following regulations shall be observed in forming the board of directors structure of an investment fund company:

• The fund company's statutes shall determine the number of board members to not exceed seven members, including a maximum of three fund shareholders, with the remainder being independent 1 experts in accordance with the detailed rules in the Authority's Board Decision No. 125 of 2015.

• The chairman of the board of directors of the investment fund company is not required to be full-time, and the board's composition may also not include a chief executive officer or a managing director.

---

1 The term "independent board member of the fund" refers to any natural person who is not an executive, not a shareholder of the fund, and not connected to it or any of its service providers directly or indirectly, and not among the senior employees, advisors, or auditors of the company during the three years preceding his appointment to the board. His relationship with the fund in his board membership shall be limited to that membership only, and he shall not receive or receive from it any compensation other than for that membership. The independent status shall cease if any of the aforementioned conditions are met, or if six years have elapsed since his membership on the fund's board of directors. The fund company shall notify the Authority within five working days from the date of termination of any board member's membership.

---

(Article Two)

Any provision conflicting with the provisions of this Decision is hereby repealed, and the central departments and sectors of the Authority shall implement it according to their respective jurisdictions.

(Article Three)

Existing investment fund companies operating prior to the effective date of this Decision shall regularize their status to comply with its provisions at the first general assembly meeting of the fund company, and at the latest within one year from the effective date of this Decision.

(Article Four)

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

---

Chairman of the Board
Mohamed Omran

---

Financial Regulatory Authority
Office of the Chairman

---

46076

---

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

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