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Financial control obliges stock exchange companies to notify them before any amendment in the board of directors


Dr. Mohamed Omran, Chairman of the Financial Supervisory Authority, issued Resolution No. 96 of 2021 amending the Authority’s Board of Directors Decision No. 53 of 2018 regarding the controls for granting and continuing the license and the rules for owning shares of companies operating in non-banking financial activities.

 

The first article of the decision, of which “The Seventh Day” obtained a copy, stipulated that a final paragraph should be added to Article 4 of the Authority’s Board of Directors Decision No. 53 of 2018, regarding the controls for granting a license and its continuation and the rules for owning shares of companies operating in non-banking financial activities.

 

 

And (Article Four - a final paragraph): “Companies that are licensed to engage in a non-banking financial activity are obligated to notify the Authority before it makes any amendment in the formation of its boards of directors, and after two weeks without a response from the Authority, it is an approval to make this amendment.”


Article 4 of Resolution No. 53 of 2018 regarding the controls for granting and continuing the license and the rules for owning shares of public companies in non-banking financial activities states: “Without prejudice to the requirements for incorporation or licensing required in accordance with the legislation regulating each activity, companies wishing to obtain initial approval must Incorporation or obtaining a license to engage in a non-banking financial activity shall abide by the following:

 

1- Submitting a technical and economic feasibility study for the company and the products or services it provides.

 

2- That its founders include legal persons with a percentage of not less than 50% of the company’s capital, provided that the percentage of financial institutions in the company’s capital is not less than 25%, taking into account the percentage of the contribution of legal persons or financial institutions to companies operating in non-banking activities.

 

3- Disclosure of the ultimate beneficiary to the shareholders in accordance with the provisions contained in Chapter Thirteen of the Executive Regulations of the Capital Market Law.

 

4- The company’s articles of association stipulate that the cumulative voting method should be used in electing members of the board of directors, in a manner that allows for proportional representation in the board of directors membership whenever possible.

 

5- Completion of the incorporation procedures within a period not exceeding 6 months from the date of the Authority’s approval, and the Authority may extend it for another 3 months.

 

6- Fulfilling all requirements for obtaining a license within a maximum of 3 months from the date of registration in the Commercial Register.

 

7- The work on the activity is started, the required equipment is completed, the work team is appointed with the required expertise according to each activity, and the actual start of the activity is within 6 months at most from the date of obtaining the license.

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