FINANCIAL REGULATORY AUTHORITY

FINANCIAL REGULATORY AUTHORITY

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President of the Authority

Board Resolution No. (70) of 2022 dated 16/3/2022

Amending the Board Resolution No. (58) of 2018 regarding the rules, regulations and licensing procedures for banks and for certain companies conducting non-banking financial activities to conduct investment fund activities themselves or with others.

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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 Resolution No. (58) of 2018 regarding the rules, regulations and licensing procedures for banks and certain companies conducting non-banking financial activities to conduct investment fund activities themselves or with others; and after the approval of the Board of Directors in its session extended from 16/3/2022 to 22/3/2022;

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RESOLVED:

(Article One)
A new article numbered (Seventh bis 1) is added to the aforementioned Board Resolution No. (58) of 2018, with the following text:

(Article Seventh bis 1)
One or more investment funds may merge in accordance with the following regulations and procedures:

First: The supervisory committee in each of the merging funds shall prepare a draft merger agreement, which must include:
1- The reasons and objectives of the merger, and the conditions upon which it is based.
2- The date taken as the basis for calculating the assets and liabilities of the merging and merged funds.
3- The preliminary valuation of the assets and liabilities of the merging and merged funds by the management services company.

A report from the management services company detailing the basis for the preliminary valuation of assets and liabilities must be attached to the draft agreement.

Second: The supervisory committee shall refer the draft merger agreement, its appendices, and the valuation performed by the management services company for the assets and liabilities of funds wishing to merge, to the fund's auditor, no less than sixty days prior to the meeting of the board of directors of the bank or insurance company establishing the fund (or the extraordinary general assembly in other companies), as applicable. The auditor shall prepare a report on the merger procedure, and all necessary documents and papers must be made available to the auditor for performing their duties. The auditor's report must be deposited at least fifteen days prior to the meeting of the board of directors or extraordinary general assembly, as applicable, and a copy may be obtained.

Third: The draft merger agreement, its appendices, the management services company's valuation, and the auditor's report shall be presented to the policyholders' assembly of the merged fund for review and voting, with the assembly's decision issued by a two-thirds majority of the policies present at the meeting.

The conversion of the merging fund's policies into the merged fund's policies shall be based on an exchange ratio calculated for this purpose, and for the duration of the policies of objectors to the merger decision exiting the fund, pursuant to a request submitted to the fund within thirty days from the date of the Authority's ratification of the policyholders' assembly decision.

Fourth: In case the policyholders' assembly approves the merger proposal, the board of directors of the bank or insurance company establishing the fund (or the extraordinary general assembly in other companies) shall review and approve the merger, with voting conducted according to the method specified in the bank's or company's articles of association, as applicable.

In all cases, the Central Bank's approval for the merger must be obtained if the merging or merged fund is established by a bank.

Fifth: The merging fund shall submit a request to the Authority for merger procedures, accompanied by all data and supporting documents. The Authority shall rule on the request within two weeks from its submission, provided it is complete with the required documents.

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(Article Two)

This resolution shall be published in the Egyptian Gazette, on the Authority's and Egypt Exchange's websites, and shall take effect from the day following its publication in the Egyptian Gazette.

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Chairman of the Board of Directors of the Authority Dr. Mohamed Omran

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Smart Village, Building 137, Giza, Egypt
Postal Code: 110
Telephone: +202 3534535
Fax: +202 3537006
WWW.FRA.GOV.EG

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ARAB REPUBLIC OF EGYPT
FINANCIAL REGULATORY AUTHORITY
Building Bridges not Walls