Regulatory Alerts2021-01-01
Board of Directors Decision No. (1) of 2021
The Financial Regulatory Authority of Egypt issued Board Decision No. (1) of 2021 to amend Decision No. (58) of 2018 regarding licensing rules for banks and non-banking financial companies. The amendment introduces Article Seventh (1/1), permitting open-end investment funds to issue multiple tranches provided they share a unified investment objective, maintain separate accounts, establish independent document holders' assemblies, and secure a minimum five million Egyptian pound reserve with at least 2% participation per tranche. The decision mandates full disclosure of tranche-specific terms in the prospectus or information memorandum and takes effect the day after publication in the Egyptian Gazette.
Financial Regulatory Authority FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Board of Directors Decision No. (1) of 2021 dated 18/1/2021 Amending Board of Directors Decision No. (58) of 2018 regarding the rules and procedures for licensing banks and certain companies conducting non-banking financial activities to conduct themselves or with others the activity of investment funds
The Board of Directors of the Financial Regulatory 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 Board of Directors Decision No. (58) of 2018 regarding the rules and procedures for licensing banks and certain companies conducting non-banking financial activities to conduct themselves or with others the activity of investment funds; and after approval by the Board of Directors in its meeting held on 18/1/2021;
Decided: (Article One)
A new article numbered Seventh (1/1) is added to the aforementioned Board of Directors Decision No. (58) of 2018, with the following text:
(Article Seventh (1/1))
More than one issue of open-end investment fund documents may be offered, subject to the following controls: 1- All issues must fall within the same investment objective targeted by the fund. 2- Each issue must have independent accounts. 3- Each issue must have a fund document holders' assembly composed of subscribers to the documents of that issue, and its formation, meetings, and competencies shall follow the provisions stipulated in the Executive Regulations of the Capital Market Law. 4- The reserved amount by the establishing entity for the fund's account as a whole shall not be less than five million Egyptian pounds, with a participation of not less than (2%) of the size of each issue.
Smart Village, Building 136, Giza, Egypt Postal Code: 110 Tel: +202 35354530 Fax: +202 35370036 WWW.FRA.GOV.EG
Financial Regulatory Authority FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
5- The prospectus or information memorandum must include disclosure of the terms and data of each issue, in accordance with the data stipulated in the Executive Regulations of the Capital Market Law. The prospectus or information memorandum may be prepared in a unified format or separately for each issue, depending on the clarity of the fund's investment plan.
(Article Two)
This Decision shall be published in the Egyptian Gazette and on the websites of both the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors of the Authority Dr. Mohamed Omran
Smart Village, Building 136, Giza, Egypt Postal Code: 110 Tel: +202 35354530 Fax: +202 35370036 WWW.FRA.GOV.EG 2