Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

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Decision of the Board of Directors of the Financial Regulatory Authority

No. (32) for the year 2019 dated 24/02/2019

Amending Decision No. (11) of the Board of Directors of the Authority for the year 2014

Regarding the Rules for Listing and Delisting Securities at the Egyptian Exchange

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The Board of Directors of the Financial Regulatory Authority

Having reviewed Law No. (159) of 1981 on Joint Stock Companies, Limited Partnerships with Shares, Limited Liability Companies, and Single-Shareholder Companies, and its executive regulations;
and the Capital Market Law No. (95) of 1992 and the decisions issued in implementation thereof;
and Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments;
and Presidential Decree No. (191) of 2009 on the provisions governing the management of the Egyptian Exchange;
and its financial regulations;
and the Statutes of the Financial Regulatory Authority issued by Presidential Decree No. (192) of 2009;
and Decision No. (11) of the Board of Directors of the Authority for 2014 regarding the rules for listing and delisting securities at the Egyptian Exchange;
and Decision No. (55) of the Board of Directors of the Authority for 2018 regarding the controls and means of publication for companies that offered securities in a public offering or have securities listed on the Egyptian Exchange;
and upon the approval of the Board of Directors of the Authority in its meeting held on 24/02/2019;

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Decided

(Article One)

The third paragraph of Article (1 bis) of the Rules for Listing and Delisting Securities at the Egyptian Exchange issued by the aforementioned Decision No. (11) of the Board of Directors of the Authority for 2014 shall be replaced, and the third and fourth paragraphs of Article (7), section (a) under first of Article (16), and Article (24) of the same Rules shall be issued with the following texts:

Article (1 bis) – Third Paragraph:

Companies whose securities were previously listed on the Exchange prior to the implementation of Decision No. (142) of the Board of Directors of the Authority for 2017 regarding the amendment of the rules for listing and delisting securities at the Egyptian Exchange, and which have not yet offered their securities,

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shall obtain the approval of the Egyptian Exchange Management in the event it wishes to extend the deadline for offering its securities. The Exchange Management may, in cases it deems appropriate – based on a timeline plan submitted by the company to the Exchange on a date not exceeding 30 April 2019 – approve extending the offering execution deadline up to a maximum of 30 September 2019. Failure to execute the offering within this deadline shall result in the company's securities listing being deemed null and void.

Article (7) – Issued Third and Fourth Paragraphs:

The shares of companies not meeting conditions (5) and/or (8) of this Article may also be listed in any of the following cases:

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Fourth Paragraph

In the five cases mentioned above, the retention ratio of each major shareholder in the company upon listing must not be less than 75% of their share in the company's capital and not less than 51% of the company's total shares, until the financial statements for the year in which the conditions stipulated in item 5 and/or 8 of this Article are met are approved. It is required that at least two full financial years have passed since the listing date on the Exchange, and that the aforementioned ratio be maintained in any capital increase for the same period, excluding bonus shares.

Article (16) – First – (Item a):

First: Foreign Shares:

The shares issued by foreign companies may be listed provided they meet the following conditions:

(a) The company's shares must be listed on one of the foreign exchanges subject to the supervision of an authority exercising powers similar to those of the Authority in the capital market field, and the shares must be in Egyptian Pounds or a convertible foreign currency exchangeable for Egyptian Pounds.

The company's shares may also be listed if they are not listed on a foreign exchange, provided that more than 50% of its equity, assets, and revenues belong to its Egyptian subsidiary companies. It is required that the company submit consolidated financial statements for the two financial years preceding the listing request as stipulated in item (b) of this Article, and commit to preparing its financial statements post-listing in accordance with Egyptian accounting standards and Egyptian audit standards.

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Article (24)

Listing of Shares of Companies Resulting from Restructuring via Division or Merger:

In the event a company with listed shares or Egyptian deposit certificates undergoes corporate restructuring involving a dividing company and one or more divided companies, the listing data of the dividing company shall be amended, and the shares of the resulting divided companies from the restructuring shall be listed – after registration with the Authority – as an extension of the listed company. This applies after the companies resulting from the division/restructuring are registered in the Commercial Register, subject to the continued availability of the minimum number of shareholders, capital, total number of shares, and free-float share ratio for both the dividing and divided companies' shares following the publication of the disclosure report for each resulting company, in accordance with the executive regulations of Law No. (159) of 1981. The report shall be published on the website designated by the Authority for this purpose, on the trading screens of the Egyptian Exchange, and on the company's website. A summary of the report shall also be published in one of the widely circulated daily Egyptian newspapers in Arabic, according to the form prepared by the Authority for this purpose. Shares of companies resulting from restructuring via merger, or those issuing shares as consideration for capital shares in the merged company, shall also be listed provided the merging companies were listed on the Exchange, subject to the same conditions stipulated in the preceding paragraph of this Article.

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(Article Two)

Two new cases, namely the fourth and fifth, shall be added to the cases stipulated in the third paragraph of Article (7) of the Rules for Listing and Delisting Securities at the Egyptian Exchange, as follows:

Fourth: Without prejudice to the legal restrictions on share trading stipulated in Articles (45, 46) of Law No. (159) of 1981 on Joint Stock Companies, Limited Partnerships with Shares, Limited Liability Companies, and Single-Shareholder Companies, Article (138) of its executive regulations, and Article (53) of Investment Law No. (72) of 2017, companies obligated to prepare consolidated financial statements shall submit their financial statements covering the period from their establishment date until the date of submitting the listing request. These must be prepared according to the conditions and stipulations mentioned in Condition (5), accompanied by a limited periodic examination report from the external auditor, as well as annual financial statements accompanied by the auditor's report for at least two companies. They must be approved by the company's Ordinary General Assembly and authenticated by the competent administrative authority. The total shareholders' equity of the subsidiary companies of the company obligated to prepare consolidated financial statements, whose shares are required to be listed, must not be less than their total paid-up capital according to the actual financial statements of those companies for the last financial year preceding the listing request. The net profit ratio before deducting taxes generated from the activity stipulated in its articles of association in the last financial year preceding the listing request must not be less than 5% of the paid-up capital as shown in its financial statements. Furthermore, the net profit ratio before taxes, calculated annually in periodic financial statements if prepared, must not be less than 5% of the capital weighted by the duration.

Fifth: Companies resulting from restructuring via division into companies whose shares are not listed on the Egyptian Exchange shall submit their financial statements for one full financial year preceding the listing request. These must be prepared according to the conditions and stipulations mentioned in Condition (5), accompanied by a limited periodic examination report from the external auditor, as well as the latest annual financial statements of the dividing company. All must be approved by the Ordinary General Assemblies of the companies and authenticated by the competent administrative authority. It is required that the net profit ratio before deducting taxes generated from the company's activity stipulated in its articles of association in the last financial year preceding the listing request must not be less than 5% of the capital as shown in its financial statements.

For companies resulting from restructuring via merger into companies whose shares are not listed on the Egyptian Exchange, they shall submit their financial statements covering the period from the completion of the restructuring until the date of submitting the listing request. These must be prepared according to the conditions and stipulations mentioned in Condition (5), accompanied by a limited periodic examination report from the external auditor, as well as the annual financial statements accompanied by the auditor's report for two financial years of the merging companies. They must be approved by the company's Ordinary General Assembly and authenticated by the competent administrative authority, subject to the availability of listing conditions for the merging companies prior to the merger.

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(Article Three)

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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Board of Directors of the Authority

Chairman of the Authority

Dr. Mohamed Omran

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Smart Village, Building No. B-136, Giza, Egypt

Postal Code: 12577 Tel.: +202 35345350 - Fax: +202 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