Regulatory Alerts2019-01-01
Circular Letter No. (9) of 2019
The Financial Regulatory Authority (FRA) of Egypt issued Circular Letter No. (9) of 2019 to clarify the permissible scope of activities for licensed financial consulting companies. The directive explicitly permits these firms to concurrently perform financial valuation, fair value studies, and subscription promotion and underwriting services, provided they strictly avoid serving the same client for both valuation and underwriting activities. Additionally, the circular mandates the complete separation of accounting records between the financial consulting operations and the promotion and underwriting operations to ensure regulatory compliance.
Financial Regulatory Authority
FINANCIAL REGULATORY AUTHORITY
Deputy Chairman of the Authority
Circular Letter No. (9) of 2019
Date: 21/8/2019
Subject:
Conditions for Financial Consulting Companies to Engage in the Activity of Promotion and Underwriting of Subscriptions.
In implementation of the provisions of the Board of Directors Decision of the Financial Regulatory Authority No. (14) of 2018 regarding the conditions and controls for registering financial consulting companies and licensed entities to perform financial valuation and prepare fair value studies;
And in light of inquiries received by the Authority regarding the permissibility of financial consulting companies engaging in the activity of promotion and underwriting of subscriptions.
The Authority refers to what is stated in Article Five of the Authority's Board of Directors Decision No. 114 of 2018, mentioned in item 3/1, "Commitment to not combine the performance of valuation tasks and other tasks performed by other registered entities, specifically the tasks of promotion and underwriting of subscriptions for the same client."
Therefore, financial consulting companies are permitted to combine the performance of financial valuation tasks, preparation of fair value studies, and promotion and underwriting tasks, provided that this is not done for the same client for whom the financial consulting company performs financial valuation and fair value study tasks, and subject to ensuring the separation of accounts for both the financial consulting activity and the promotion and underwriting activity accounts.
This decision is published on the Authority's website.
Deputy Chairman of the Authority
Khaled Al-Nashar
46076
Smart Village, Building 136-B, Giza, Egypt
Postal Code: 12577
Tel.: +202 3534535 - Fax: +202 3534535
info@fra.gov.eg
Smart Village, Building no. B-136, Giza
Postal Code : 12577
Tel.: (00202) 35345350 - Fax.: (00202) 35370036
www.FRA.gov.eg