Aggregated News From Investment Management Regulators

FRA’s Board of Directors approves setting a legal framework for green bond issuance for the first time in Egypt – Wednesday 18/7/2018

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• Dr. Omran: The Authority will set more controls to protect investors dealing with Portfolio Management Companies
• Dr. Omran: FRA’s BOD shall complete the latest amendments to the Executive Regulations of the Capital Market Law to put them into effect
• Two new members shall join the Capital Market Advisory Committee (CAC) to benefit from their experience
• Issuing new rules related to the electronic distribution of micro-insurance policies through NGOs

 Dr. Mohammed Omran- FRA’s  Chairman announced that in its session that was held the day before yesterday,  FRA’s Board of Director approved the addition of  a new article that regulate the rules and regulations set  for the issuance of green bonds in order to provide new  financial instruments to finance environmentally friendly projects, including new and renewable energy projects, transportation   projects (electric transportation ) , that is  within the framework of  the discussions  held for amending  the Executive Regulations of the Capital Market Law.

Dr. Omran added that FRA’s Board of Directors will issue the rules and procedures set for the issuance of green bonds in accordance with the “best international practices” within the framework of a partnership with the International Finance Corporation (IFC) and in accordance with The Green Bond Principles (GBP) issued by the International Capital Markets Association (ICMA). One of the most important regulatory rules  is identifying the concept of green bonds, its types and areas of use it in financing environmentally friendly projects and also, defining entities which can issue green bonds and requirements for their issuance. One of the  most prominent rules are the procedures set for evaluating and selecting environmentally friendly projects and the compatibility of these projects with conditions of clean environment , disclosure requirements and periodical reports.

 In addition, the Board approved some amendments to the provisions governing the activities of Portfolio Management Companies. The said amendments introduce more controls to protect investors dealing with these companies and its employees. In addition, the amendment stated that the contract shall include the client’s desire to practice margin trading and short selling besides the periodical reports that the company must send to investors. Also, if the company is engaged portfolio management and Investment management then it shall have an independent management of each activity to avoid conflicts of interest.

It should be noted that FRA’s Board of Directors has issued several decisions in its previous sessions to introduce many  amendments to the recent Capital Market Law promulgated by Law No. 17 of 2018. The most prominent of these are the rules and procedures related to the issuance of sukuk  and what should be included in the prospectus or information memorandum on the issuance and purpose of Sukuk, beneficiaries of financing, terms of reference and group composition of sukuk holders ,  as well as regulating  private stock exchanges,  and other  amendments related to regulating short selling activity  and the detailed provisions of  tender offers for acquisition besides  other procedures related to the cancellation of bearer securities.

FRA’s Chairman pointed out that the coming period will witness the adoption of new measures towards the issuance of some amendments to the Executive Regulations of Capital Market Law.
On the other hand, Dr. Omran said that the Board approved a decision on  the controls set for the electronic distribution of  micro-insurance policies  through companies, associations and NGOs  licensed to practice micro-insurance activity.

Regarding the Capital Market Advisory Committee (CAC), the Board of Directors assigned  Mr. Yasser El Masry – Managing Director – Arab African international Securities and Mr. Mahmoud Gibril, Managing Director of Amwal Financial Investment Company to join the Capital Market Advisory Committee in order to benefit from their experience in this field.
 

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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