Aggregated News From Investment Management Regulators

EFSA issued the First Egyptian Financial valuation Standards


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• Sherif Samy: The issuance of the first Egyptian Financial valuation Standards comes within the context of enhancing the objectivity of disclosures
• Financial valuation Standards regulate the professional conduct and independency of the appraiser, steps and methods of work and objectivity of the valuation report
• Within two years, EFSA has issued financial valuation Standards and participated in updating Accounting Standards

EFSA’s BOD  issued  the first Egyptian Financial valuation Standards which aim at achieving the  objectivity of  valuations and fair value studies in order to enhance investors’ protection  and promote the confidence of financial institutions and other dealers in the market upon valuating securities for purposes of offering , acquisitions , capital  increase and contributions to investment funds and other investment and financing decisions.

Sherif Samy – EFSA’s Chairman revealed that the Egyptian Financial valuation Standards is considered as a guide for the best global practices. It was issued after being presented for social dialogue and consultations with associations operating in capital market, investment and financial analysis.  He added that EFSA published the draft law on its Web site to be available for a large number of  specialists to give their suggestions and comments. These standards issued  to complete the system of disclosure. It includes the Egyptian Accounting Standards and the Egyptian Auditing Standards in addition to the Egyptian Real Estate evaluation standards.

EFSA’s  Chairman pointed out  that the standards  include “scope of application” and “standard of professional conduct” and ”  Professional Competence  Requirements” as well as ” scope of work” and ” implementation of the valuation process” and ” reasonableness of assumptions” in addition to “valuation  methods ” preparation of  valuation report “.

Sherif Samy stressed that those standards which are issued pursuant to Decision No. 1 of 2017 are binding on all independent financial consultants and their assistants and shall apply to all cases related to the valuation companies, securities or other assets taking the form of facility or project and all valuations related to the capital market or its executive regulations or rules listing and delisting rules.

The standards need the professional competence, integrity, objectivity and independency of those undertaking that process, and they shall avoid conflicts of interests or common interests.

Sherif Samy pointed out that the standards define  valuation steps that start  with  understanding  the nature of the activity and  market and sector’s conditions ,  predicting  its  future performance according to the set assumptions , then selecting  an appropriate valuation  form , addressing  the results of the valuation form  and comparing  the results to prepare the final report .

Sherif Samy added that the latest standard regulates the preparation of the valuation report and the disclosures stated therein. Also, it stated that the fees paid to the appraiser do not dependent on the value of the valuation or the fair value.

EFSA’s Chairman noted that though the Egyptian Financial valuation Standards are binding on activities related to the capital market, but it can be applied in other cases. He pointed out that it will be periodically reviewed like any other global standards and updated based on the results of the application and in light of proposals submitted by economic unions and associations. He added that it will be sent to various related parties including the Ministry of Public Business Sector, Ministry of Finance and the Central Auditing Agency to review it.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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