Board of Directors Secretariat

General Authority for Financial Supervision Board of Directors Resolution No. (28) of 2017

Dated 6/3/2017
Regarding the Cases, Conditions, and Procedures for Reducing the Size of Closed-End Funds

Board of Directors of the General Authority for Financial Supervision

Having reviewed the Companies Law No. (159) of 1981 regarding Joint Stock Companies, Partnerships Limited by Shares, and Limited Liability Companies; and the Capital Market Law No. (95) of 1992 and its executive regulations and decisions issued thereunder; and the Central Depository and Registry of Securities Law No. (93) of 2000 and its executive regulations; and the Law Regulating Supervision on Non-Banking Financial Markets and Instruments No. (10) of 2009; and Presidential Decree No. (192) of 2009 issuing the Statute of the General Authority for Financial Supervision; and Board of Directors Resolution No. (11) of 2014 regarding the rules for listing and delisting securities on the Egyptian Exchange and its amendments; and upon the approval of the Authority's Board of Directors in its session held on 6/3/2017.

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RESOLVED

(Article One)

Closed-end investment funds may reduce their size in the cases and in accordance with the conditions and procedures set forth in this Resolution.

(Article Two)

The size of closed-end investment funds may be reduced in any of the following cases:

1. The fund realizes losses necessitating a reduction in its size, subject to the ratios stipulated in this Resolution.
2. Reducing the fund's size to a specified portion of the document's value in circumstances where the document's value may be paid in installments according to the fund's category.
3. The desire of a charitable investment fund to support the social or charitable objectives of these funds during their first years of establishment, exceeding realized profits up to a limit of (20%) of the fund's size, until the fund realizes profits or returns from its investments to sustain those activities.
4. Any other cases approved by the Authority.

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(Article Three)

Closed-end investment funds shall adhere to the following conditions when reducing their size:

1. The prospectus or information memorandum must include the possibility of reducing the fund's size and its cases if the fund is issuing its documents for the first time, or when amending the prospectus or information memorandum if the fund is already established.
2. The fund's size shall not be reduced more than once per year, and the reduction ratio shall not exceed (20%) of the fund's size each time.
3. The proceeds from the size reduction shall be used in accordance with the fund's objectives and investment policy, as outlined in the prospectus or information memorandum.
4. The reduction shall not result in the fund company's capital falling below the minimum stipulated in Article (142) of the Executive Regulations of the Capital Market Law.
5. The size reduction shall not result in the fund bearing liabilities exceeding the value of its investments.

(Article Four)

The following procedures shall apply when closed-end investment funds reduce their size:

1. The investment manager shall submit to the fund company's board of directors a detailed study on the reduction, including its justification and value, while adhering to the conditions stipulated in Article Three of this Resolution.
2. If the fund company's board of directors approves the reduction proposal, the board shall prepare a memorandum for submission to the document holders' assembly to obtain their approval. The memorandum must include the justification and value of the reduction, along with the investment manager's study on the matter. Additionally, a report from the fund company's auditor must be attached regarding the existence of serious grounds necessitating the size reduction, ensuring the auditor is provided with all necessary data and sufficient time to prepare this report.
3. For the validity of the document holders' assembly convened to approve the reduction and its conditions, holders representing half of the fund's outstanding documents must be present. If this quorum is not met at the first meeting, the second meeting shall be valid if holders representing (50%) of the outstanding investment documents attend, and the decision shall in all cases be issued by a two-thirds majority of those present at the meeting.
4. In the event the document holders' assembly approves the proposed size reduction, the fund company's board of directors shall convene an Extraordinary General Assembly to agree on the proposal and amend the company's articles of association to reduce its capital. The invitation must include all documents referenced in Item (2) of this Article. Voting on the reduction proposal shall follow the method specified in the company's articles of association, with the requirement that the reduction decision be issued by a two-thirds majority of shares represented at the Extraordinary General Assembly.

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(Article Five)

The fund company's board of directors is obligated to take the necessary measures to reduce the fund's size within a maximum of one year from the date of the Extraordinary General Assembly's resolution on the reduction. If it fails to do so within this period, it must re-initiate the procedures stipulated in this Resolution upon any future desire to reduce the size.

(Article Six)

After completing the aforementioned procedures, the fund company shall submit a request to the Authority to proceed with the size reduction, accompanied by the prospectus or information memorandum, the fund company's articles of association, and all data and supporting documents for the request. The Authority shall rule on the request within a maximum of two weeks from the date of submission, provided all required documents are complete.

(Article Seven)

This Resolution 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.

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Chairman of the Board of Directors
Sherif Beyhi

(Seal: General Authority for Financial Supervision - Chairman of the Authority)