Aggregated News From Investment Management Regulators

FRA issues the statute of Financial Leasing and Factoring Unions – Tuesday 26/11/2019


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• Dr. Omran: Any company shall be a member in Financial Leasing Union and Egyptian Factoring Union once it obtains the license
• Dr. Omran: Both unions are competent to resolve customers’ complaints amicably
• Dr. Omran: FRA appoints a constituent committee for each Union to take the necessary steps to convene the Unions’ first General Assembly

In its meeting held last weekend, FRA’s BOD approved the statute of both Financial Leasing Union and the Egyptian Factoring Union, each Union shall have its legal independent personality which will contribute in developing financial leasing and factoring, raising awareness of both activities and adopting initiatives supporting both activities. Both Unions shall ensure that members apply the code of ethics and the rules governing their obligations and rights that is besides developing skills of those operating in both activities.

Dr. Mohammed Omran, FRA’s Chairman explained that FRA’s BOD decisions were issued within the framework of the Authority’s policy to encourage the establishment of self-regulated professional entities that include those operating in financial leasing and factoring activities and set the rules governing the obligations and rights of its members. Also, it shall settle costumers’ complaints – amicably – within a month from the date of submission.

FRA’s Chairman said that the statutes stated that both Unions shall set a “code of ethics” for those operating in both activities. The General Assembly and the Authority shall approve the Code of ethics. In addition, both Unions shall set a guide for companies subjected to Law no. 176 of the year 2018 regulating both financial leasing and factoring activities, without prejudice to the laws in force and the decisions issued in implementation thereof.

Dr. Omran said that both Unions would be allowed to formulate proposals and make recommendations to develop financing activities. Besides, it shall express its views on draft laws in the future and propose amendments to existing legislation.

Dr. Omran noted that FRA’s BOD decision no. (149) and (150) of 2019 each provided that the two Unions exercise their powers through their organs represented in the General Assembly formed by one representative of each member of the Union who have fulfilled the financial obligations due in accordance with this Law and until the Assembly’s meeting . They are required to be chairpersons of the boards of directors, managing directors, senior managers assigned by a decision of the chairman or managing director. Both unions shall have an elected board of directors, as well as specialized committees concerned with the implementation of policies and programs necessary to achieve the objectives of both Unions, in accordance with the annual work plan prepared by its Board of Directors and approved by the General Assembly. Such committees may recommend to the Board of Directors of the Union shall question any  member that may commit  an act that would cause moral or moral harm to the Union, violate the Code of Ethics or violate any of the provisions of the Law. That is besides the Union’s executive management headed by a full-time Executive Director appointed by a decision of the Board. The Unions’ administration shall have the necessary expertise and competence to fill the position.  The Executive Director shall be assisted by an appropriate number of employees to carry out the technical, financial, administrative and service tasks necessary to manage the Union and achieve its objectives.
FRA’s Chairman confirmed that each leasing company subjected to the provisions of Law No. (176) of 2018 regulating financial leasing and factoring shall be a member of the Union. In addition, any factoring company subjected to the same law shall be a member of the Union once it obtains a license from the Authority to practice the activity and registered in the Authority’s registry.

Dr. Omran stressed that once the statutes of both Unions are published in the Egyptian Gazette, the Authority will appoint a constituent committee for each Union. This committee consists of at least five members representing companies licensed to practice both activities (financial leasing / factoring) in order to take the necessary steps towards convening the first meeting to elect the board of directors and take the required decisions to activate the union and start its activity.  On the other hand,  the first general assembly will be held in the presence of companies licensed to practice the activity within a period not exceeding six months from the formation of the committee referred to so as to consider the approval of income , expenses and auditor’s report for the period.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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