Official Gazette - No. 60, Part (A) on March 13, 2023

Capital Market Authority

Capital Market Authority Board Decision No. 51 of 2023

Dated 8/3/2023

Regarding the conditions for registration and deregistration of precious metals custody service providers as one of the movable financial assets in the Authority's register

The Board of Directors of the Capital Market Authority
Having reviewed the Capital Market Law issued by Law No. 95 of 1992 and its executive regulations;
and Law No. 10 of 2009 regulating supervision over non-banking financial markets and instruments;
and the Capital Market Authority Board Decision No. 71 of 2021 regarding conditions for investment funds' transactions in precious metals as one of the movable financial assets;
and after the approval of the Authority's Board in its sessions held on 22/2/2023 and 8/3/2023;

Decided

(Article One)

A register for the registration of precious metals custody service providers as one of the movable financial assets is established within the Authority, and the register must include at a minimum the following information and data:

1. The service provider's name, legal form, and purpose.
2. The address of its main center and service delivery location.
3. The name of the Managing Director or the person responsible for actual management.
4. The investment funds for which it provides services.

(Article Two)

The service provider wishing to register in the register referred to in Article One of this Decision must meet the following conditions:

1. It must adopt one of the company forms stipulated in the Companies Law No. 159 of 1981 regarding joint stock companies, partnerships limited by shares, limited liability companies, and single-owner companies.
2. Its purposes must include the transfer and custody of funds and precious metals.
3. It must obtain the necessary approvals from relevant authorities to provide the service.
4. It must possess the technical and technological requirements specified by the Authority.
5. The premises where fund assets are stored must be secure and suitable for providing the service.
6. The founders, board members, and service providers must be of good reputation and character.
7. Payment of the service fee referred to in Article Five of this Decision.

(Article Three)

The registration application is submitted on the form prepared by the Authority for this purpose, accompanied by documents evidencing the conditions stipulated in Article Two of this Decision, along with the following documents:

1. A copy of the preliminary contract and the company's articles of association.
2. A recent extract from the company's commercial register.
3. A copy of the property deed for the company's premises.
4. A statement of the company's board members and directors, along with their qualifications.

(Article Four)

A committee comprising legal and technical experts is formed by the Authority's Chairman to conduct field inspections to verify the availability of administrative, IT infrastructure, organizational structures, and other requirements necessary for registration. The committee prepares a report on this matter, while the Authority conducts an intensive review of the registration application to ensure compliance with the stipulated conditions and documents.
The Authority issues its decision on the registration application in accordance with market needs and geographical distribution, within a period not exceeding fifteen days from the date of fulfilling registration requirements.

(Article Five)

The registration period in the register is three years and may be renewed for similar periods, provided that the renewal application is submitted within the three months preceding the expiration of the registration period. Renewal requires compliance with and continuation of the conditions required for initial registration.
The fee for examining and studying the registration or renewal application is twenty-five thousand Egyptian pounds.

(Article Six)

Registered companies must observe the following:

1. Compliance with all decisions and instructions issued by the Authority regarding service provision, and enabling the Authority's representatives to inspect the registers, books, and investment fund assets held by the company.

2. Providing an insurance policy issued by one of the licensed insurance companies, covering at a minimum:

   • Fire, theft, loss, and damage insurance for any cause, including breach of trust covering negligence
   • or employee negligence, robbery risks during precious metals transport by vehicles within the Arab Republic of Egypt, natural disasters, and additional risks. The insurance coverage scope must also include transport and shipping-related risks if the company agrees to handle them.
   • In all cases, the contract concluded between the company and the fund must include the fund's right to claim compensation if the insured risk materializes regarding the fund's assets.

3. Exercising the care of a prudent person in providing services to contracted investment funds, specifically: adhering to the segregation of accounts for each fund, providing adequate insured infrastructure for this purpose, and necessary communication links with the fund's service providers as appropriate.

4. Avoiding conflicts of interest with related parties.

5. Notifying the Authority of investment funds for which services are provided immediately upon contracting.

6. Submitting periodic reports to the Authority and investment fund every three months regarding the assets stored with it, or whenever requested by the Authority.

(Article Seven)

The Authority's Board may, in case of loss or non-continuation of one of the registration conditions, take one or more of the following measures:

1. Issuing a notice of violations and specifying the time period required to remove their causes.
2. Temporary suspension of registration for a period not exceeding one year.

(Article Eight)

This Decision is published in the Official Gazette and on the Authority's website, and takes effect from the day following its publication date in the Official Gazette.

Chairman of the Board
Capital Market Authority
Dr. Mohamed Fared Saleh