Regulatory Alerts2021-01-01
Financial Regulatory Authority Board of Directors Resolution No. (106) for the Year 2021 Regarding Permitting Licensed Investment Fund Management Companies to Manage Other Companies' Investments
The Financial Regulatory Authority issued Resolution No. 106 of 2021 to authorize licensed investment fund management companies to manage investments for other corporate entities, provided their governing contracts or articles of association permit it. The resolution mandates that investment managers execute formal agreements detailing party rights, targeted investment scopes, and fee structures, while strictly maintaining independent accounts and avoiding conflicts of interest. Furthermore, it prohibits cross-investing corporate funds into the manager's own investment funds (except money market and debt instrument funds) or investing those funds back into the managed corporate entities, and requires periodic reporting to the Authority for oversight.
Financial Regulatory Authority FINANCIAL REGULATORY AUTHORITY
Chairman of the Authority
Resolution No. (106) of the Board of Directors for the Year 2021 dated 5 July 2021 Regarding Permitting Licensed Investment Fund Management Companies to Manage Other Companies' Investments
Board of Directors of the Financial Regulatory Authority
After reviewing the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations; and the Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; and the Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Financial Regulatory Authority; and upon approval by the Board of Directors in its session held on 5 July 2021;
has resolved
(Article One)
Licensed investment fund management companies may manage the investments of other companies, provided that their contracts or articles of association permit such management, subject to the investment manager observing the following controls:
1- Executing a contract between him and the company, which shall include at minimum:
- The rights and obligations of each party.
- The investment areas targeted for management, commensurate with the contract or articles of association of the contracted company.
- The fees and commissions received by the investment manager. 2- Observing the provisions governing the avoidance of conflicts of interest. 3- Maintaining independent accounts for each company whose investments he manages. 4- Submitting periodic reports to the Authority regarding his activities and operational results, in accordance with the provisions of this Resolution.
The investment manager is prohibited from investing the funds of the companies whose investments he manages into the investment funds under his management, except for money market funds and debt instrument funds. He is also prohibited from investing the funds of the investment funds under his management into other companies whose investments he manages.
(Article Two)
This Resolution shall be published in the Egyptian Gazette and on the Authority's official website, and shall take effect from the day following its publication in the Egyptian Gazette.
Chairman of the Board of Directors Dr. Mohamed Omran