Minister of Investment Decision No. (6) of 2016 Amending Certain Provisions of the Executive Regulations of the Capital Market Law Issued by Decision No. (135) of 1993

Ministry of Investment
Minister

Minister of Investment Decision No. (6) of 2016 Amending Certain Provisions of the Executive Regulations of the Capital Market Law Issued by Decision of the Minister of Economy and Foreign Trade No. (135) of 1993

The Minister of Investment
Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations; and the Commercial Law No. (17) of 1999; and Law No. (10) of 2009 regulating supervision over markets and non-banking financial instruments; and Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Financial Regulatory Authority; and Presidential Decree No. (387) of 2015 delegating certain authorities to the Prime Minister, designating him as the minister responsible for applying the provisions of Law No. (10) of 2009; and Prime Ministerial Decision No. (2573) of 2015 delegating to the Minister of Investment the authorities of the minister responsible for applying the provisions of the law regulating supervision over markets and non-banking financial instruments issued by Law No. (10) of 2009; and after approval by the Board of Directors of the Financial Regulatory Authority; and based on the ruling of the State Council;

Decided:

(Article One)
A definition for the Charitable Investment Fund shall be added to the definitions set forth in Article 141 of the Executive Regulations of the Capital Market Law issued by Decision of the Minister of Economy and Foreign Trade No. (135) of 1993, placed following the definition of the Real Estate Investment Fund and preceding the definition of the Fund's General Assembly, as follows:
Charitable Investment Fund:
A fund taking the form of a private equity fund or a real estate investment fund, the distribution of profits and returns generated from its investments shall be restricted to expenditures for social or charitable purposes, through recognized non-governmental organizations or associations, government entities, or affiliated entities related to charitable activities.

(Article Two)
The following new articles shall be added to the aforementioned Executive Regulations of the Capital Market Law, numbered 35 bis (1), 179 bis, and 315 bis (1):

Article 35 bis (1):
The issuance of bonds and financing certificates without the obligation to provide a credit rating for them is permitted, provided that their offering is private, in accordance with the rules established by the Authority's Board of Directors, which shall specifically include the following:

1. Determining the financial institutions and persons of financial soundness who are permitted to subscribe to them.
2. Disclosure requirements to be complied with throughout the duration of the aforementioned bonds and financing certificates.
   These bonds and financing certificates shall not be listed on any Egyptian stock exchange except with prior approval from the Authority on a case-by-case basis, with such approval to be announced, in accordance with the controls established by the Authority's Board of Directors in this regard.

Article 179 bis:
Licensing the establishment of a charitable investment fund is permitted for entities determined by a decision of the Authority's Board of Directors. The charitable fund's articles of association, and the offering circular or information memorandum as applicable, shall stipulate that the distribution of profits and returns generated from the fund's investments until its dissolution shall be restricted to expenditures for social or charitable purposes determined by the Authority's Board of Directors, through recognized non-governmental organizations or associations, government entities, or entities supervised by or affiliated with them related to charitable activities. The fund's articles of association, as well as the offering circular or information memorandum as applicable, shall specify the entity to which the value of its investment documents shall be transferred upon redemption, and the fund's assets upon its dissolution, whether due to expiration of its term, achievement of its founding purpose, or if circumstances prevent it from conducting its activity, provided that this entity is a government entity, a supervised or affiliated entity interested in social or charitable activities, or a recognized non-governmental organization or association related thereto. The Authority's President shall issue a model articles of association for charitable investment funds. The investment documents thereof shall not be listed on securities exchanges, and the Authority's Board of Directors shall establish the necessary controls for trading and transferring ownership of such documents outside securities exchanges. The size of the fund, its capital, or the value of the document may be increased or decreased in the cases specified in the offering circular or information memorandum and in accordance with the controls established by the Authority.

Article 315 bis (1):
Joint stock companies, other than securitization companies, may be licensed by the Authority to issue bonds secured by a portfolio of their financial rights.
The Authority's Board of Directors shall issue the necessary controls for issuing these bonds, observing all rules and procedures set forth in item three of Article (7) of these Regulations, as well as Branch Four of Chapter One of Part One of these Regulations, which shall specifically include the following:

1. The conditions that must be met by companies permitted to issue bonds against a financial portfolio independent of the company's other assets.
2. Additional guarantees for the payment of bond returns and principal value, aside from the financial rights portfolio.
3. Credit rating requirements to be complied with.

(Article Three)
The title of Chapter Five of Part Ten of the Executive Regulations of the Capital Market Law shall be amended to read: (Issuances by joint stock companies, other than securitization companies, of bonds against an independent portfolio of the company's financial rights).

(Article Four)
The last paragraph of Article (34) of the aforementioned Executive Regulations of the Capital Market Law shall be repealed.

(Article Five)
This Decision shall be published in the Egyptian Gazette, and shall take effect from the day following its publication.

Minister of Investment
Sharaf Salaman
2016/7/27