Ministry of Investment

Minister

Decision

Minister of Investment Decision No. (141) of 2006 Adding a New Chapter to the Executive Regulations of the Capital Market Law

The Minister of Investment,
Having reviewed the Capital Market Law issued by Law No. 95 of 1992, And the Executive Regulations of the Capital Market Law issued by Decision of the Minister of Economy and Foreign Trade No. 135 of 1993, And after obtaining the opinion of the General Authority for the Capital Market.

Decided

(Article One)
A new chapter is added to the Executive Regulations of the aforementioned Capital Market Law, titled "Chapter Eleven - Rules Prohibiting Price Manipulation and Insider Information Exploitation", with the following text:

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Chapter Eleven

Rules Prohibiting Price Manipulation and Insider Information Exploitation

Section One

General Provisions

Article (316)

Without prejudice to the obligations stipulated for companies operating in the securities field and issuing companies under the Law and these Regulations, the provisions of the following articles shall apply to all such companies and to market participants in the securities market, whether natural or legal persons, and others related to the securities market, each according to the nature of their activity.

Article (317)

Any condition stipulated by a company in its issued documents that covers or exempts any of its employees, its manager, or the chairman and members of its board of directors from liability arising from a violation of the provisions of this Chapter, or mitigates such liability, shall be deemed void.

Article (318)

Anyone who violates the obligation to comply with the provisions of this Chapter shall be subject to legal liability and shall be subject to the penalties and measures stipulated in the Capital Market Law and its Executive Regulations, without prejudice to the right of any person harmed by price manipulation or trading based on insider information to seek compensation for damages caused by the violator. The same legal liability shall apply to any person who knowingly causes or assists another person to engage in conduct in violation of the provisions of the preceding articles, or who participates in trading based on insider information.

Article (319)

The following terms shall have the meanings indicated alongside each of them:

(a) Price Manipulation:
Any act or omission intended to influence the trading prices of securities, which is likely to harm all or some market participants. Price manipulation shall be subject to the provisions of Article 6/63 of the Capital Market Law.

(b) Material Information:
Information or information that has a tangible effect on the price of the offered or tradable security, or an effect on the investment decisions of its traders, or an effect on trading trends in the market. Material information becomes public when made available to the public of traders at the same time and in the same manner, in accordance with the rules and procedures governing and organizing disclosure at the exchange.

(c) Insider Information:
Any material information that is disclosed to the public of traders and is related to the operations of a company whose securities are traded, or any of the parties or entities associated with it.

(d) Insider:
Any person who has access to information regarding the company or its issued securities that could yield a benefit for themselves or another person, whether obtained legally or illegally, and whether they accessed the information directly or received it through another person directly or indirectly. The exploitation of insider information shall be subject to the provisions of Article (64) of the Capital Market Law.

(e) Insider Trader:
Any person who has realized a benefit, whether direct or indirect, from insider information or its exploitation. The beneficiary of the aforementioned information shall be considered to have realized a benefit from it for the application of the provisions of Article (64) of the Law in this case.

(f) Affiliated Group:
Any group of traders or other persons subject to the actual control of two natural persons or the same legal persons, or by combining their votes when voting at the general assembly meetings of the company issuing the security or its boards of directors.

Article (320)

Issuing companies, parties, and associated or jointly operating entities are prohibited from publishing any false or inaccurate news with the intent to deliberately influence prices or traders to achieve a specific objective. These companies and other parties shall exercise due diligence regarding the news they announce and shall be liable to compensate those harmed by what they publish in the event its falsity or inaccuracy is proven. The legal representative of the issuing company bears the responsibility to promptly respond to any inquiries received by the company from the Authority or the Exchange immediately upon receipt, and such response must be accurate and supported by documents, especially in cases of responses indicating the occurrence of a material event. The legal representative of the company shall bear responsibility for the inaccuracy of what the response contains.

Section Two

Prohibition of Price Manipulation

Article (321)

Price manipulation of securities is strictly prohibited, and in particular, the following acts are prohibited:

• 1. Influencing the market or prices through any transaction by executing operations that do not result in a change of the beneficial owner.
• 2. Executing pre-arranged operations with the intent to create the impression of trading in a specific security.
• 3. Publishing or assisting in the publication of misleading or inaccurate news.
• 4. Publishing news regarding the imminent change in the price of a security in order to influence its price and trade on it.
• 5. The issuing entity participating in trading its own securities with the purpose of influencing their price, or in a manner that harms any traders thereof, without prejudice to the provisions governing the trading of treasury shares.
• 6. Providing false or inaccurate information through any media outlet that could influence the market or its participants to achieve personal benefit or benefit a specific person or entity.
• 7. Conducting operations or placing or ordering trades on the exchange with the intent to create the impression of trading in a security or manipulating its price to facilitate its sale or purchase.
• 8. Participating in any agreements or practices that lead to the illusion or deception of investors, or to misleadingly influence or control the prices of certain securities or the market in general.
• 9. Acting alone or in concert with others to enter orders into the exchange trading systems with the aim of providing a misleading or false impression of the volume, activity, liquidity, or price of a specific security in the market.
• 10. Acting alone or in agreement with others to enter orders into the exchange trading systems for a specific security to influence its price, whether upward, downward, or stable, to achieve unlawful objectives such as influencing investment values for private gain, tax evasion, or reaching a specific price previously agreed upon with another party to achieve a purpose contrary to the law, rules, or professional standards, such as inflating the prices of certain securities to obtain credit against them as collateral.
• 11. Exploiting an order or a group of orders issued by a client or group of clients, where the volume of these orders could move the price of a security, or trading in the same direction as these orders before their execution, which may yield profits from the unlawful exploitation of client orders. It is also prohibited to agree with others or issue recommendations to them to move in the same direction as these orders before their execution.
• 12. Trading under fictitious names and accounts to execute certain transactions, or placing fictitious orders in the exchange trading systems that are not matched with genuine buy or sell orders, or placing orders at unjustified prices that create a misleading apparent state not reflecting actual trading reality.
• 13. Controlling or attempting to control buy or sell orders in the market, or acquiring or attempting to acquire a controlling position in a security to manipulate its price, create unjustified prices, or influence traders' decisions regarding it.
• 14. Publishing false or misleading information about the market with the intent to move order prices and steer sentiment in a specific direction.
• 15. Refraining from offering or requesting securities for sale or purchase with the intent to influence their prices despite the existence of buy or sell orders, or agreeing with any party to conduct operations that suggest the existence of a supply or demand for these securities.

Section Three

Prohibition of Insider Information Exploitation

Article (322)

Insiders, by virtue of their positions or the nature of the tasks they perform, are prohibited from exploiting such information for their personal account or for others, or from disclosing such information to another party directly or indirectly.

Article (323)

Disclosing client account prices and transactions, or performing any act likely to harm the interest of the client or any other parties, is prohibited.
Trading in a security is also prohibited if the trader is directly or indirectly aware of material information related to it and knows that it exists but has not been disclosed.
Insiders are also prohibited from disclosing such information to any other person unless that person has a fixed legal status entitling them to such access.

Article (324)

A trader in a security shall not be considered an insider user or beneficiary under the provisions of the preceding articles if it is proven that their trading was solely caused by other factors unrelated to their direct or indirect access to insider information.

Article Two

This Decision shall be published in the Egyptian Gazette and shall take effect from the day following its publication date.

Issued at the Ministry of Investment on 20 Rabi' al-Awwal 1427 AH corresponding to 18 April 2006 AD

Minister of Investment
Dr. Mahmoud Mohieddin

Deputy Minister
(Sayed Salout)

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