Secretariat of the Board of Directors

Board of Directors Decision No. (35) of 2016

Dated 23/3/2016
Amending Board of Directors Decision No. (11) of 2014
Regarding the Rules for Listing and Delisting Securities on the Egyptian Exchange

Board of Directors of the Egyptian Financial Regulatory Authority

Having reviewed the Joint Stock Companies, Partnerships Limited by Shares and Limited Liability Companies Law issued by Law No. (159) of 1981 and its executive regulations;
and the Capital Market Law issued by Law No. (95) of 1992 and the decisions issued pursuant to it;
and the Central Deposit and Registration of Securities Law issued by Law No. 93 of 2000 and its executive regulations;
and Law No. (10) of 2009 regulating supervision over non-Egyptian markets and financial instruments;
and Presidential Decree No. (191) of 2009 on the provisions organizing the management and financial affairs of the Egyptian Exchange;
and the FRA Statute issued by Presidential Decree No. (192) of 2009;
and Board of Directors Decision No. (11) of 2014 regarding the Rules for Listing and Delisting Securities on the Egyptian Exchange and its amendments;
and the approval of the Board of Directors in its meeting held on 23/3/2016;

Decided:

(Article 1)

The definition of Independent Board Member in Article (4), the title of Chapter Four and Item (a) thereof, Article (33), and the first paragraph of Article (37) of the Rules for Listing and Delisting Securities on the Egyptian Exchange are replaced as follows:

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Article (4): Definitions

Independent Board Member: A non-executive board member who is not a shareholder of the company and is not linked to the company, its parent companies, subsidiaries, sister companies, or any related parties by any employment, contractual, or board membership relationship during the three years preceding their appointment, nor is he the spouse or a second-degree relative of any of them.

Chapter Four: Governance, Minority Rights Protection, and Financial Statements

First: Governance and Minority Rights Protection

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Article (33): Announcement of Distribution Decisions and Implementation Controls

The company issuing the financial instrument is obligated to announce the decision of its competent authority regarding cash distributions or free share distributions or both, subject to the following:

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(a) Notify the Exchange of the General Assembly's distribution decision immediately and before the first trading session following the General Assembly meeting.

(b) Notify the Exchange of the distribution date at least fifteen days prior to the specified distribution date, with such announcement to be published in two widely circulated daily industrial newspapers, at least one of which must be in Arabic.

(c) A shareholder becomes entitled to their share of cash dividends or free shares upon the General Assembly's decision to distribute them. If any shares are traded during the period from the company's General Assembly decision to distribute cash dividends or free shares (or both) until the end of the day preceding the specified payment date, all aforementioned rights must transfer to the new share owner.

For small and medium-sized companies, the publication of the aforementioned decisions and announcements shall be limited to the Exchange's trading screens and their website for a period of no less than three working days.

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Article (37), First Paragraph

Subject to the provisions of Article (86) of Law No. 88 of 2003 and Articles (27) and (28) of its executive regulations, every company with Egyptian shares or depositary receipts listed in the Exchange's table shall have an audit committee. The selection of its members and the determination of its duties shall be decided by the Board of Directors, provided that its members number no fewer than three non-executive board members known for competence and expertise in the company's field of work, including at least two independent members.

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(Article 2)

Item (w) is added to Article (40), and Articles (43) bis, (44) bis, and (51) bis are added to the Rules for Listing and Delisting Securities on the Egyptian Exchange, as follows:

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Article (40)

w. All guarantee contracts concluded by the company with one of its founders or major shareholders and their affiliated groups during the preceding year, the value of each contract, its terms and details, and the date of prior General Assembly approval for each of these contracts.

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Article (43) bis: Controls on Disposing of More Than 50% of the Company's Assets

The company shall not dispose of more than 50% of its fixed assets and other assets related to the company's business operations without the approval of the Extraordinary General Assembly.

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Article (44) bis: Controls on Acquiring Ownership in a Sister Company by Controlled Companies

Without prejudice to the provisions of Chapter Two of the Executive Regulations of the Capital Market Law, a company listed on the Exchange and subject to the actual control of another person or company shall not acquire ownership in a sister company, nor shall the sister company acquire ownership in it exceeding 10% of its shares and Global Depositary Receipts (GDRs). For the application of this Article, actual control refers to owning 50% or more of the shares and GDRs of the controlled companies.

This provision shall not apply to existing participations at the time this decision takes effect, provided that the ownership percentage is not increased beyond what currently exists.

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Article (51) bis: Trading Treasury Shares through Subsidiary Companies

In the event that the company purchases its shares through a subsidiary or a company under its actual control, the purchased shares shall be classified as treasury shares, and all provisions pertaining to treasury shares shall apply to them.

Companies listed on the Exchange purchasing treasury shares are obligated to dispose of such shares to third parties within a maximum of one year from the date of acquisition. For the purposes of this provision, the company disposing of these shares to a subsidiary or a company under its actual control shall not be considered a third party.

Actual control refers to the concept stated in Article (44) of these Rules.

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(Article 3)

Companies and entities with financial instruments listed on the Exchange are obligated to formalize their status in accordance with the amendments to Articles (37 and 40) no later than June 30, 2016.

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(Article 4)

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 issuance. The Egyptian Exchange and the competent department within the Authority shall implement it according to their respective jurisdictions.

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Chairman of the Authority
Sherif Samy

Egyptian Financial Regulatory Authority (FRA)
Office of the Chairman

46076