Regulatory Alerts2020-01-01
Board of Directors Decision No. (150) of 2020 Amending Decision No. (51) of 2014 Regarding Conditions for Founders of an Investment Fund Company
The Financial Regulatory Authority (FRA) of Egypt issued Board Decision No. 150 of 2020 to amend Decision No. 51 of 2014 regarding the eligibility criteria for founders of investment fund companies. The amendment formally adds investment fund management companies and asset management companies to the list of authorized financial institutions eligible to establish such funds. Additionally, it permits these entities to hold board seats in privately offered fund companies while explicitly restricting their participation in discussions or voting on investment manager-related matters, subject to strict conflict-of-interest and independence safeguards.
Financial Regulatory Authority FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Decision No. (150) of 2020 dated 16/8/2020 Amending Board of Directors Decision No. (51) of 2014 Regarding the Conditions Required for Founders of an Investment Fund Company
The Board of Directors of the Financial Regulatory Authority Having reviewed the Capital Market Law issued by Law No. (90) of 1992 and its executive regulations; Having reviewed Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; Having reviewed Board of Directors Decision No. (51) of 2014 regarding the conditions required for founders of an investment fund company; Having reviewed Board of Directors Decision No. (57) of 2018 regarding governance controls for establishing the board of directors structure of investment funds structured as joint stock companies; Having reviewed Board of Directors Decision No. (58) of 2018 regarding rules, controls, and licensing procedures for banks and certain non-banking financial companies to conduct investment fund activities themselves or jointly with others; And after approval by the Board of Directors in its session held on 16/8/2020; Has decided
(Article One) A new item numbered (8) is added to the list of financial institutions set forth in Article One of Board of Directors Decision No. (51) of 2014, with the following text: 8- Investment fund management companies (investment manager) and asset management companies (companies whose activity involves managing investment funds and forming and managing securities portfolios).
Financial Regulatory Authority FINANCIAL REGULATORY AUTHORITY
Chairman of the Board of Directors
(Article Two) Without prejudice to the controls for establishing the board of directors of investment funds structured as joint stock companies as stipulated in the aforementioned Board of Directors Decision No. (57) of 2018, the companies referred to in Article One of this Decision may be represented on the boards of directors of fund companies whose documents are offered privately to qualified investors, without participating in discussions or voting on matters related to the investment manager. Furthermore, the companies referred to are bound by the controls for avoiding conflicts of interest and independence controls stipulated in the executive regulations of the Capital Market Law and Board of Directors decisions issued in this regard.
(Article Three) This Decision shall be published in the Egyptian Gazette and on the Authority's website, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors Mohamed Omran 46076
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