The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Law No. 17 of 2018

Amending Certain Provisions of the
Capital Market Law Issued by Law No. 95 of 1992

In the Name of the People
The President of the Republic

The House of Representatives has decreed the following law, which we hereby issue:

(Article 1)

The provisions of Articles (1/ Paragraph 1), 4, (6/ Paragraphs 5 and 6),
12, 8, (15/ Paragraph 2), (17/ Paragraph 2), 23, 24, 26, 35,
(36/ Paragraph 3), 38, 41, 63, 64, 66, (68/ Paragraph 1) of the Capital Market
Law issued by Law No. 95 of 1992 are replaced with the following provisions:

Article (1) Paragraph 1:

The capital of a joint stock company and the shares of non-partner shareholders in limited partnerships by shares shall be divided into equal-value registered shares.

Article (4)

No Egyptian or foreign legal entity, regardless of its nature or applicable legal system, may offer or issue financial instruments or securities in a public offering to the public except based on a prospectus approved by the Authority, on forms prepared by the Authority, and in accordance with the conditions and procedures specified in the Executive Regulations of this Law. A summary of the prospectus, offering circular, or disclosure report for the offering must be published through the media channels designated by the Authority's Board of Directors.

Without prejudice to the preceding paragraph, the Authority's Board of Directors shall issue the guidelines to be followed when offering any financial instruments or securities in a public offering, general offering, or private placement, depending on the type of security or financial instrument.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Article (6) Paragraphs 5 and 6:

The company shall publish a summary of the financial statements, accompanying notes,
and the auditor's report through the media channels in accordance with the rules and
guidelines established by the Authority's Board of Directors.

Furthermore, any company facing material circumstances affecting its operations or financial
position must immediately disclose such circumstances through the media channels in accordance
with the rules and guidelines established by the Authority's Board of Directors.

Article (8)

The Executive Regulations of this Law shall govern the provisions of takeover bids and acquisition operations of shares and other securities convertible into shares in companies whose securities are listed on stock exchanges, or that have offered securities in a public offering, or through a general offering even if not listed on stock exchanges, specifically as follows:

1. Guidelines and requirements for protecting minority shareholders' rights.
2. Circumstances requiring mandatory offers to purchase securities.
3. Executive procedures and disclosure requirements for takeover bids or acquisition operations.
4. Circumstances requiring prior or subsequent disclosure of securities purchase or sale transactions on stock exchanges.

Article (12)

Bonds, financing certificates, and other securities shall be issued by resolution of the company's general assembly, in accordance with the rules and procedures outlined in the Executive Regulations of this Law. They may be offered in a public offering with a license from the Authority.

If the aforementioned bonds, financing certificates, and other securities are short-term with a maturity not exceeding two years, the issuance decision may be based on the approval of the company's board of directors, provided it obtains authorization from the company's general assembly, or approval from the competent authority in other legal entities, in accordance with the rules and procedures established by the Authority's Board of Directors regarding their issuance and offering in a public or private placement.

In all cases, the issuance decision must specify the yield generated by the bond, certificate, or security, and the basis for its calculation, without being restricted by the limits stipulated in any other law.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Article (15) Paragraph 2:

A financial instrument or security may be listed on more than one stock exchange with the Authority's approval, in accordance with the conditions and guidelines issued by a decision of the Authority's Board of Directors.

Article (17) Paragraph 2:

The Authority's Board of Directors shall issue a decision establishing the rules and procedures for trading securities not listed on Egyptian stock exchange boards, and the procedures for transferring their ownership.

Article (23)

A special fund shall be established by a decision of the Prime Minister, upon the proposal of the Authority's Board of Directors, to insure market participants against non-commercial risks arising from the activities of companies whose securities or financial instruments are listed on Egyptian stock exchanges or those operating in the field of securities and financial instruments.
The fund shall possess a separate legal personality.

The establishing decision shall specify its administrative system, the rules for the participation of the aforementioned companies in its board of directors, each company's contribution ratio to its resources, the penalty for delayed payment of such contributions, any amounts due to the fund for missed deadlines, as well as the rules for spending and investing these resources, the risks insured by the fund, the basis for compensation, the procedures to be followed regarding the accounts of each category of participants in the fund, and the guidelines for withdrawing from these accounts to cover risks per category.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Article (24)

The competent Minister shall issue a decision, based on the proposal of the Authority's Board of Directors, establishing the brokerage commission system, the maximum limits for service fees for transactions conducted on stock exchanges, and the fees and charges for listing securities and financial instruments, not exceeding annually two per thousand of the value of the shares and related financial instruments to be listed, with a maximum of five hundred thousand pounds, and sixty thousand pounds as a maximum for bonds, debt certificates, and other debt instruments.

The fees stipulated in this Article shall not apply to the listing of securities or financial instruments issued by the State.

Article (26)

With the approval of the Authority's management, stock exchanges may be established possessing a separate legal personality, taking the form of a joint stock company, with trading restricted to one or more types of securities. A stock exchange may not conduct its activities until it obtains a license from the Authority.

The Authority's Board of Directors shall issue a decision specifying the conditions required for a joint stock company to be licensed for stock exchange activities, including requirements for shareholders, capital, board composition, meeting rules, and other technical and administrative elements.

The Authority's Board of Directors shall also issue a decision governing the procedures for applying for approval to establish a private stock exchange, and how to verify that the company meets the required conditions.

The Authority's Board of Directors shall set licensing fees not exceeding one hundred thousand pounds.

The Authority shall issue a model articles of association for the stock exchange company containing rules ensuring its proper governance, specifically:

• Conditions required for the company's shareholder structure, board of directors members,
  executive directors, membership committee members, and other committees.

• Rules to avoid conflicts of interest among board members and stock exchange employees,
  and the prohibition of using available information for personal benefit or disclosing it to others.

• Methodology for forming and organizing the work of stock exchange committees.

• Authority of the stock exchange board of directors to prepare financial statements in accordance with Egyptian accounting standards.

• The company shall have two auditors selected from the Authority's auditors registry,
  chosen and compensated by a resolution of the company's general assembly.

• The Executive Regulations of this Law shall govern the procedures for voluntarily suspending the stock exchange's activities, the consequences thereof, and its classification in such cases.

• The provisions of Article (31) of this Law shall apply to the stock exchange company.

Article (35)

Investment funds aiming to invest savings in securities may be established within the limits and under the conditions specified in the Executive Regulations of this Law.
The Authority's Board of Directors may license the fund to trade in other transferable securities or in other investment fields, in accordance with the rules and conditions specified in the Executive Regulations of this Law.
The investment fund must take the form of a joint stock company with paid-up capital, and the Authority's Board of Directors shall determine the rules for the board's structural composition, considering the nature of investment fund activities.

Article (36) Paragraph 3:

Subscription to these documents shall be conducted through one of the banks, or securities companies licensed by the Authority to do so, in accordance with the guidelines established by the Authority's Board of Directors.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Article (38)

The securities in which the fund invests its funds shall be held by a bank licensed by the Authority for custody activities and subject to the supervision of the Central Bank of Egypt, provided that the bank and its related parties do not control the fund management company or hold a share exceeding the limit determined by the Authority's Board of Directors, while adhering to the conflict of interest avoidance rules established by the Authority's Board of Directors.

The fund shall submit to the Authority a statement regarding the aforementioned securities, certified by the custodian, on the form and within the deadlines specified by the Authority.

Article (41)

Banks, with the approval of the Central Bank of Egypt, and companies conducting non-banking financial activities as specified by a decision of the Authority's Board of Directors, may conduct investment fund activities themselves or with others, under a license from the Authority.

The Authority's Board of Directors shall issue rules, guidelines, and procedures for licensing, initiating activities, and the Authority's supervision and oversight.

Article (63)

Without prejudice to any harsher penalty stipulated in any other law, imprisonment for a term not exceeding five years and a fine not less than fifty thousand pounds or the actual effective profit obtained or expected loss avoided, whichever is greater, not exceeding (20) twenty million pounds, or twice the actual effective profit obtained or expected loss avoided, whichever is greater, or either of these two penalties shall be imposed upon anyone who:

1. Conducts any activity subject to the provisions of this Law without being licensed to do so.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

2. Offers financial instruments or securities through a public offering, general offering, or private placement, or receives funds therefor in any manner, in violation of the provisions of this Law or the decisions issued to implement it.
3. Intentionally includes false or non-compliant data in prospectuses, incorporation documents, licenses, or other reports, documents, or announcements related to the company, or alters such data after approval by the Authority.
4. Intentionally issues false data regarding securities for which a licensed entity is receiving subscriptions.
5. Forges company records, intentionally records false facts therein, or presents reports to the company's general assembly containing false data.
6. Engages in fictitious transactions or attempts by fraud to influence market prices.
7. Lists securities or financial instruments on the exchange in violation of the provisions of this Law and its Executive Regulations.
8. Fails to fulfill commitments regarding minority shareholders' rights or certificate holders' rights.
9. Fails to comply with the financial valuation standards issued by the Authority.
10. Issues certificates or offers them for trading in violation of the provisions of this Law.
11. Violates the provisions of Article (14 bis - 18) of this Law.
12. Evaluates assets or their benefits fraudulently.

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The Official Gazette - No. 10 Duplicate (H) on 14 March 2018

Article (64)

Without prejudice to any harsher penalty stipulated in any other law, imprisonment for a term not less than two years, and a fine not less than fifty thousand pounds or the actual effective profit obtained or expected loss avoided, whichever is greater, not exceeding (20) twenty million pounds or twice the actual effective profit obtained or expected loss avoided, whichever is greater, or either of these two penalties shall be imposed upon anyone who discloses a secret related to or accessed through their work in applying the provisions of this Law, or profits from it personally, or through their spouse or children, or records false facts in their reports, or omits facts affecting the results in such reports, or trades in securities or financial instruments in violation of the provisions stipulated in Article (20 bis) of this Law.

Article (66)

A fine not less than five thousand pounds and not exceeding one hundred thousand pounds shall be imposed on anyone who trades in securities or financial instruments in violation of the rules stipulated in this Law, and a fine not less than one thousand pounds and not exceeding five hundred thousand pounds shall be imposed on anyone who acquires securities or financial instruments without making a mandatory purchase offer in cases requiring it according to the provisions of this Law and its Executive Regulations.

The violator in this case shall be ordered to refund the value of the securities or financial instruments subject to the violation, and settlement of this violation shall not be permitted except after submitting the mandatory purchase offer and paying a fee to the Authority not less than (1%) and not exceeding (10%) of the value of the securities or financial instruments subject to the violation.

Article (68) Paragraph 1:

The person responsible for the actual management of the company shall be subject to the penalties prescribed for acts committed in violation of the provisions of this Law, provided that their knowledge of such acts is established and the violation occurred due to their failure to fulfill their official duties.