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Applying the Final Beneficial Owner Identification Rules

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• Sherif Samy: Amendments to the Capital Market’s Executive Regulations govern disclosures related to the beneficial owner and promote transparency

Sherif Samy – EFSA’s Chairman revealed that Final Beneficial Owner Identification Rules come into force after publishing a decision that amends the Executive Regulations of the Capital Market Law in Egyptian Gazette (issue no. 73 dated 28 March 2017).

He pointed out that the cases in which these rules will be applied include  the following :  issuing companies’ shares , amending the ownership structure, approving mandatory and voluntary tender offers, IPOs, in addition to listing of securities in one of the Stock Exchanges as well as establishing any activity related to the companies operating in securities , or participating in any activity by 10% or  more of the share capital or acquiring 10% or more .

He pointed out that the decision of the Minister of Investment and International Cooperation no. 33 of 2017 stated that a new chapter shall be added to the Executive Regulations entitled “Chapter 13 – Final Beneficial Owner Identification Rules “. Also, it states other cases defined by EFSA’s Board of Directors to achieve market stability and transparency of activities.

Sherif Samy revealed that EFSA shall disclose the legal form, the law, the founding state, nationality, activity, the entity’s BOD, the person who has the right to sign instead of the legal person, in addition to the ownership structure in cases of companies or mutual funds, including anyone who owns 10% or more. In case the ownership structure includes legal persons whose ownership exceeds 50% of the company’s capital, the data shall also be submitted.

EFSA’s Chairman pointed out that in cases other than issuing shares of a company or amending the ownership structure, if the ownership structure   includes any legal person who contributes by 25% or more – alone or with related parties – taking the legal form of a company, disclosures shall be submitted and  this shall be applied to all entities he contributed in.

Sherif Samy added that the amendments to Executive Regulations include for the first time the rules set for disclosures required from the trust funds.  A trust fund is a type of legal arrangement in which a trustee holds title to property, such as stocks, bonds, or real estate, and administers it for the benefit of another person or institution, known as the beneficiary, according to the terms of the trust instrument. He explained that the required disclosures for the fund shall include the governing law, the trustor  and trustee of the fund, number of their license and the entity under their control, in addition to the limits granted to them regarding management of the funds and fund’s property. Also, disclosures related to the trustor  and trustee , and beneficial owner shall include the name or the family relationship or other relationships or beneficiaries, whether charity or other legal persons.
 

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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