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2020-01-01

Decision of the Board of Directors of the General Authority for Financial Supervision No. (45) of 2020 on Professional Liability Insurance for Financial Consulting and Licensed Valuation Entities

The Financial Regulatory Authority (FRA) of Egypt issued Decision No. 45 of 2020 mandating that licensed property and liability insurers provide professional liability coverage for financial consulting and valuation firms registered or seeking registration with the Authority. The decision requires insurance policies to cover professional negligence against Egyptian Financial Valuation Standards and basic performance guidelines, with coverage amounts set at double the firm's annual fees (minimum 100,000 EGP) and a minimum policy duration of three years. Furthermore, the decision stipulates that policies cannot be cancelled without an official directive from the FRA and takes effect the day after publication in the Egyptian Gazette.

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Financial Regulatory Authority Egypt

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Financial Regulatory Authority

FINANCIAL REGULATORY AUTHORITY

Chairman of the Authority

Decision of the Board of Directors of the General Authority for Financial Supervision

No. (45) of 2020 dated 2020/3/22 on Professional Liability Insurance Arising from the Practice of Financial Consulting Companies and Licensed Entities Performing Financial Valuation and Fair Value Studies with the Authority

The Board of Directors of the General Authority for Financial Supervision Having reviewed Law No. 10 of 1981 on Supervision and Regulation of Insurance in Egypt and its Executive Regulation and amendments; and Law No. 95 of 1992 on Issuance of the Capital Market Law and its Executive Regulation and amendments; and Law No. 10 of 2009 on Regulating Supervision over Non-Banking Financial Markets and Instruments; and Presidential Decree No. 192 of 2009 Issuing the Statute of the General Authority for Financial Supervision; and Investment Minister Decision No. 101 of 2007 on Adding the Financial Advisory Services for Securities Activity to the Activities of Companies Operating in the Securities Sector Stated in Article (27) of Law No. 95 of 1992 on Issuance of the Capital Market Law; and General Capital Market Authority Board Decision No. 18 of 2007 on Conditions for Registering Financial Advisors in the Register Maintained by the Authority; and Authority Board Decision No. 1 of 2017 on Issuing the Egyptian Financial Valuation Standards for Consultants; and Authority Board Decision No. 85 of 2018 on the Conditions Required for Board of Directors Membership of Companies Subject to the Authority's Supervision and its amendments; and Authority Board Decision No. 114 of 2018 on Conditions and Controls for Registering Financial Consulting Companies and Licensed Entities Performing Financial Valuation and Fair Value Studies with the Authority and its amendments; and Authority Board Decision No. 22 of 2019 on Extending the Deadline for Documenting the Registration Status of Financial Consulting Companies for Securities and Licensed Entities Performing Financial Valuation and Fair Value Studies with the Authority;

and Authority Board Decision No. 83 of 2019 on Extending the Deadline for Documenting the Registration Status of Financial Consulting Companies for Securities and Licensed Entities Performing Financial Valuation and Fair Value Studies with the Authority;

and Memorandum from the Central Department for Financial Product Approval dated 2020/03/05;

and the approval of the Authority's Board of Directors in its meeting held on 2020/3/22.

Decided

(Article One)

Property and Liability Insurance Companies licensed by the Authority shall, when issuing professional liability insurance policies for companies and foreign entities, whether registered or seeking registration in the Financial Advisors Register and Licensed Entities Performing Financial Valuation and Fair Value Studies / or upon renewal of registration, adhere to the following insurance conditions:

  • The policy must cover professional liability arising from the company/entity and its specialized staff performing financial valuation and fair value studies, and their non-compliance with the Egyptian Financial Valuation Standards for Consultants and the Basic Standards of Professional Performance issued by the General Authority for Financial Supervision.

  • The insurance amount must be double the company's total annual fees received, with a minimum of 100,000 Egyptian Pounds (One Hundred Thousand Egyptian Pounds).

  • The insurance period must not be less than three years.

  • The policy shall not be cancelled except by an official letter from the Authority.

(Article Two)

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

Dr. Mohamed Omran

46,76

Smart Village, Building 137, Giza, Egypt Postal Code: 110 Telephone: +202 35445350 Fax: +202 35370066 WWW.FRA.GOV.EG

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