Dr. Omran: Encouraging the establishment of investment funds and facilitating licensing procedures is an ongoing process
Dr. Mohammed Omran – FRA’s Chairman reveals that FRA’s BOD approves an amendment to investment funds rules. The new amendment allows private legal entities other than entities subjected to the FRA’s supervision – where investment shall be included among its purposes – to start investment funds activity with banks licensed by the Authority and approved by the Central Bank. In addition, private legal entities engaged in investment funds shall operate with insurance and reinsurance companies, companies engaged in establishing companies which issue securities or increase their capital (investment banks) and microfinance companies licensed by the Authority to carry out these activities and granted a license by FRA to practice investment funds activity.
FRA’s Chairman said that decision No. (160) of 2019 came in response to the wish of many legal entities and to encourage the establishment of investment funds and facilitate licensing procedures. This step came after evaluating the current situation within the non-banking financial sector and the entry into force of some amendments to the provisions of the recent Capital Market Law, issued by Law No. 17 of 2018, which reflect the Authority’s strategic orientation towards increasing the efficiency and depth of the Egyptian Capital Market.
Dr. Omran added that the controls previously issued by FRA in the first half of 2018 to practice investment funds activity have authorized companies or entities which are licensed to carry out the activity by themselves or with others to operate in all types of investment funds except real estate investment trusts (REITs). In addition, the fund may be opened or closed according to the fund’s type. The prospectus or information memorandum, as the case may be, shall specify the type and category of the fund. Also, the activities, funds, investments and liabilities of the Fund shall be separated from the funds of the entity licensed to practice the activity itself and shall have separate accounts, invoices and records.
FRA’s Chairman stressed that the company or the party licensed to be engaged in investment funds’ activity is committed to appoint a committee to supervise the Fund, provided that members shall not be more than five, including one representative of each entity. Meanwhile, the remaining members shall be independent and experienced in accordance with the rules of expertise and competence.
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