FRA’s Board of Directors headed by Dr. Mohammad Omran issued a decision that introduces subscription in mutual funds certificates through brokerage companies which engaged in an activity or more than five activities – specifically – Investment Banking, participating in the establishment of companies that issue securities or Join to increase their capital, clearing and settling of securities transactions, dealing and brokerage in bonds or securities brokerage
Dr. Mohammed Omran – FRA’s Chairman emphasized that the decision represents the first amendment to the Capital Market Law promulgated by Law No. (17) of 2018 which included the amendment of the third paragraph of Article (36) where FRA allows subscription in mutual funds certificates for brokerage companies in accordance with the rules set by FRA’s Board of Directors.
He added that Board’s decision no. 33 of 2018 stipulated that the license shall be granted to a brokerage company which practice one of the five activities referred to. Besides the brokerage companies shall abide by the membership rules of the investor protection fund in accordance with stated rules. In addition, the Authority shall initiate criminal proceedings against any major shareholder in the Company or a member of its Board of Directors in respect of any of the crimes stated the Capital Market Law or it’s Executive Regulations which may affect the market or its dealers.
FRA’s Chairman noted that after submitting the application for license signed by the legal representative of the company and accompanied by documents supporting the availability of the conditions set for granting the license, the Authority will study the application and decide it within a period of not more than five working days from the date of submission. If the application is approved then the license shall be issued to practice the said activity linked with number of the company’s main license.
Also, FRA’s Chairman stressed that in accordance with the provisions of the said decision, the companies licensed to practice subscription in mutual funds certificates shall not subscribe in more than one fund at the same time unless it obtains the approval of FRA’s Chairman . Also, the company is committed to hold independent accounts for each subscription separately.
In addition, funds of subscriptions shall be separated from the company’s funds. The company shall have separate accounts, records and registries with an independent account at the bank for subscription in mutual funds certificates.