CHAPTER THREE
SECURITIES INTERMEDIATION COMPANIES

(FINANCIAL INTERMEDIARIES)

SECTION ONE

GENERAL PROVISIONS

Article (120)

	The securities intermediation companies are those engaged in one or more of the activities that include, but not limited to, the following:

1.	Underwriting and promotion of securities.

2.	Establishing companies which issue securities, or sharing their capital increase.

3.	Venture Capital.

4.	Clearance and settlement of securities transactions.

5.	Formation and management of securities portfolios1, and formation of investment funds (mutual funds).

6.	Brokerage in securities2.

7.	Other activities related to securities intermediation as may be defined by the Minister of Economy, after approval of the Authority's Board of Directors.

Article (121)

	Underwriting and promotion of securities include the following:

1.	Management of the business of securities underwriting, promoting the sale and distribution of securities and encouraging investment therein, as well as the activities related to mass media publicity and required for this purpose;

2.	Underwriting of securities whether or not offered to the public, and re- offering them for public subscription or for direct placement in the same terms and conditions set fourth in the prospectus as filed, within a period of not more than one year from date of certifying the prospectus by the Authority, and regardless of the nominal value of the security;

	Issuer of the security shall provide the company with the amendments or modifications made during this period so that it can take the necessary measures in conformity with the provisions of Article (49) of these Regulations thereof.

	The company shall conduct its business in accordance with the provisions of the Law, the decrees issued for their implementation thereof and the agreement it concludes with the concerned parties.

	The Authority shall be notified with a copy of this agreement. It shall advise the company with its observations and comments thereon within thirty days from the date of such notification.

Article (122)

	The company shall be considered a holding company if it falls within the following categories:

1.	If the primary purpose of the company is to conduct such a business;
2.	If the company alone or together with its founders holds more than half of the capital of five or more joint stock, or limited partnership companies;
3.	If the company alone or together with its founders has control over the formation of the board of directors of five or more of joint stock or limited partnership companies; and
4.	If the company conducts the business of establishing joint stock or limited partnership companies, or sharing their capital increase in a manner which makes such a business one of its primary objectives. 

Article (123)

	The business of venture capital includes the financing of companies issuing securities, supporting them, or rendering them technical and management services, or taking part in projects and establishments and their development with a view to converting them into joint stock or limited partnership companies if these projects and establishments are of high risk nature, or suffering from financial deficit.

Article (124)

	The securities intermediation companies as defined by the Law should take the legal form of a joint stock or a limited partnership company.

	            It should keep the books, ledgers and records necessary for the conduct of its business in addition to other records as defined by these Regulations.

Article (125)

	The issued capital of the company engaged in one or more of the activities specified in Article (27) of the Law shall be as follows:

1.	Minimum L.E. 250,000 for securities brokerage, with no less than one-quarter as paid-up capital.
2.	Minimum Three million pounds for each of the following activities, the paid-up part of which should not be less than one-half:
3.	Underwriting and promotion;
4.	Establishing companies which issue securities or sharing their capital increase;
5.	Clearance and settlement of securities;
6.	Formation and management of securities' portfolio.
7.	Minimum Five million pounds for the investment funds to be paid in full.
8.	Minimum Ten million pounds for the venture capital to be paid in full.

Article (126)

	The maximum value of the operations carried out by the companies specified in Article (120) of these Regulations, with regard to each activity, should be determined in relation to its capital and the insurance amount paid by it according to the rules established by the Authority's Board of Directors.

	The insurance amount shall be determined in consideration of the size and type of the business of the company, the risk involved in conducting such business and the liabilities of the company.

Article (127)

	Irrespective of its governing law, the companies which are engaged in the business specified in article (27) of the Law shall not be incorporated except in accordance with the provisions of the Law and the conditions stipulated therein as well as these Regulations.

	The founders or the managing director, as the case may be, may apply for the Authority's approval in principal before they proceed with the incorporation or licensing of the company. The application should be supported with the documents as defined by the Authority.

	Approval shall be subject to market needs of the business for which the licensing is being sought or for which the company is being incorporated.

	           In case the purposes of the company are multiple they should not be conflicting.	

SUBSECTION ONE

INCORPORATION

Article (128)

	Applications for the incorporation of securities intermediation companies shall be submitted to the Authority on the form it prepared enclosing the following documents: 

1.	Three copies of the initial contract of incorporation and the statute of the company signed by the founders or their proxy;

2.	A certificate from the Commercial Register indicating non-confusion between the trade name of the company and of any others;

3.	Acknowledgment of the competent authority of the corporate person with the appointment of its representative in the Company's board of directors, in case such person becomes a member of the board of directors;

4.	Acknowledgment of the company's Auditor confirming his acceptance of his appointment in this capacity; 

5.	Certificate from the entity receiving subscriptions indicating the full cover of subscription to all shares of the company, that the minimum payable amount of the cash shares or portions is already paid, and that no withdrawals shall be made from this amount except after registration of the company's statute and incorporation's contract with the Commercial Register;

6.	Statement from the founders' attorney of any amendments made to the model of the initial contract of incorporation and to the statute of the company;

7.	If the contract of incorporation stipulates the establishment of founder's portions or profit share, the provision should be made of documents proving the existence of such commitment together with a certificate indicating their assignment thereof to the company after its incorporation;

8.	If the capital of the company includes payment in-kind, a certificate indicating that such in-kind share has been valuated and that its relevant procedures has been completed; and

9.	Receipt of the payment of incorporation fees to the Authority.

Article (129)

	The Authority shall maintain a record in which all incorporation applications are recorded with successive serial numbers as per the date of submission of each. Each application shall have a special file in which all incorporation documents and its related procedures are kept. 

	The Authority shall provide the applicant with a receipt indicating submission of the application, its date and number of its entry into the said record.

Article (130)

	A committee shall be established by a decree of the Authority's Chairman comprising technical and legal competence to examine the applications for the company's incorporation.

	Such a committee shall have a technical secretariat composed of a sufficient number from the Authority's staff.

	The Chairman of the Authority shall determine the remunerations of the committee members and the technical secretariat.

Article (131)

	            The committee's secretariat shall record all incorporation applications in the record stipulated in Article (129) hereof.  When all the documents are complete the case shall be submitted to the committee for examination. If the documents are incomplete or information are missing the concerned parties shall be notified therewith within fifteen days from date of submitting the application in order to complete them. An indication to this effect shall be made in the record accordingly.

Article (132)

	The committee's denial of the application should be supported with reasons.

	The committee's approval decision shall not be final except after the Authority's Chairman endorsement thereon.

	            The concerned parties should be notified with the Committee's decision within fifteen days from date of its endorsement.

SUBSECTION TWO

LICENSING

Article (133)

	It is unlawful to conduct any of the business related to securities intermediation except after obtaining a license therewith from the Authority.

	The licensed companies shall be registered with the Authority in a special register prepared for this purpose indicating the company's serial number, the type of license granted to it and including company's information, its capital, members of its board of directors and managers and its branch offices.

	Each company granted this license should be given a certificate indicating the type of business it is licensed for and it should refer to in its correspondence.

Article (134)

	Licensing fees are paid to the Authority as follows:

1.	Two Thousand pounds for each type of business of the securities intermediation companies as stipulated in Article (27) of the Law with the exception of the investment funds and venture capital activities. In case of combining all or part of these activities the licensing fee shall be Ten Thousand pounds at a maximum.

2.	Ten Thousand pounds for the Investment Fund and the Venture Capital.

3.	Ten Thousand pounds for the Investment Manager.

Article (135)

	The application for licensing shall be submitted on the form prepared for this purpose, enclosing the following:

1.	Certificate of the company's registration in the Commercial Register and the registration date, number and place;

2.	The activities required to be carried out and the extent of capital adequacy in relation to these activities;

3.	Names of members of the board of directors, the directors and their experiences as defined by the Authority's Board of Directors in this respect;

4.	A proof that the founders, members of the board of directors and the directors were not convicted of any crime, felony or misdemeanor, concerning honor and integrity or in one of the crimes stipulated in the Company and Trade laws, or to any declaration of bankruptcy unless rehabilitated;  

5.	The receipt indicating payment of the license fee;
6.	The receipt indicating payment of the insurance amount as specified by the Authority's Board of Directors; and

7.	Any amendments that may be made to the information and documents pertaining to the company and on the basis of which it is incorporated.

Article (136)

	The license shall be granted by a decree of the Authority's Chairman within sixty days from date of submitting complete documentation to the Authority.  

	The license denial decision should be causative.

	The concerned parties should be notified with the Authority's decision within fifteen days from date of its issuance.

Article (137)

	The denial decision regarding incorporation or licensing applications may be contested before the Contesting Committee stipulated for in Chapter Five of the Law within fifteen days from the date of notifying the concerned party, or his knowledge thereof. The contest should include the reasons for lodging it and shall be supported with documentation.

	The Contesting Committee shall proceed with the examination of the contest and it may, in the course of so doing, request any further clarifications either from the contestant or the Authority. The relevant decision should be taken within fifteen days from the date of submitting the contest or from the date of submitting the requested clarifications.

	The committee's decision regarding the contest shall be final and enforceable. Lawsuit for the nullification of the denial decision, with regard to incorporation or licensing applications, shall not be accepted before contesting.

Article (138)

	Companies or entities presently engaged in any of the activities stipulated in Article (27) of the Law, whatever its governing law is, should provide the Authority within thirty days from date of coming into force of these Regulations with the following information:

1.	The initial contract of incorporation and the statute; 

2.	The decree approving the incorporation of the company;

3.	The annual report and the approved financial statements for the last financial year;

4.	The business concern of the company;

5.	The shares it holds in the existing companies in Egypt and abroad; and

6.	Names and curriculum vitae of members of the board of directors and the managers.

Article (139)

	The companies and entities referred to in the preceding article should adjust and amend their status to comply with the provisions of the Law and the decisions issued for its implementation, within the period stipulated in Article (34) of the Law.

	Before adjusting their status and applying to the Authority for licensing they should introduce the necessary amendments to their statutes in conformity with the provisions of the Law and the executive decrees for its implementation and refer them to their relevant authorities in accordance with the terms and procedures prescribed in these statutes.

	The procedures and rules stipulated in these Regulations shall be applicable in connection with licensing.

	The provisions of this Article shall be applicable to the Public Business Sector companies in accordance with the terms and conditions as agreed between the Minister of Public Business Sector and the Minister of Economy after being consulted with the Chairman of the Authority. 	

SECTION TWO

INVESTMENT FUNDS

SUBSECTION ONE

GENERAL PROVISIONS

Article (140)

The Investment Funds aim at investing their assets in securities. They should not carry out any banking activities, particularly lending or guaranteeing any third party, or activities related to currencies or bullion speculations.

These Funds shall not deal in other financial movables or any other investment activities unless they are granted a special license from the Authority's Board of Directors and within the limit, to be specified by such Board, of the assets to be invested in this respect and subject to the provision of a study by the Fund of the areas it intends to invest in, its justification, and the expected results.

	Article (141)

	The Investment Fund Company shall be incorporated and licensed to conduct the business according to the provisions of the Law and these Regulations that govern the securities intermediary companies. On submitting the license application, the Fund should provide the Authority with the following additional information:

•	The manner of Fund management.

•	The amount of assets to be invested provided it does not exceed the maximum limits specified by its statute and these Executive Regulations.

•	The investment policy of the Fund.

•	The name of the custodian bank with which the cash money of the Fund and the securities it holds are being deposited.

•	The name of the Investment Manager, his previous experiences and copy of the contract concluded between him and the Fund.
	
Article (142)

	The statute of the Fund shall determine the manner in which the majority of members of the board of directors shall be appointed in accordance with the provisions of Article (35) of the Law, and it shall also specify how the holders of the Investment Certificates shall participate in the selection of board members. The board of directors should be formed in such a manner within the three months following the completion of subscription to the investment certificates and not later than one year from the date of issuing the Fund's license.  The Fund shall be administered during this period by an interim board of directors to be selected in the manner defined by the statute.

Article (143)

	The Fund may invest its assets in securities within the limits and according to the following conditions:

1.	The Fund shall not invest in the securities of a single company more than 10% of its assets, nor to exceed 15% of the securities issued by such company.

2.	The Fund shall not invest in the Investment Certificates issued by other Investment Funds more than 10% of its assets, nor to exceed 5% of the assets of each Investment Fund in which it is investing.

Article (144)

	The Fund should maintain a sufficient liquidity for the purpose of meeting requests of redemption of the investment certificates in accordance with the conditions of redemption specified by the prospectus.

	The Fund shall not borrow more than 10% of the value of outstanding investment certificates, provided that the loan is of a short term and approved by the custodian bank with which the Fund is depositing the securities it holds.  

Article (145)

	The Fund should not follow a policy that is likely to cause harm to the rights or interest of the investment certificates holders.

	The basic information of the Fund's prospectus shall not be amended except with the approval of the certificates' holders.
	
	The procedures of convening the general assembly meeting of certificates holders, the attendance quorum and voting shall be governed by the provisions and rules stipulated in these Regulations with regard to Association of holders of bonds, financial notes or other securities.

	The Fund Company should provide the representative of the Association with copy of the reports specified in Article (58) thereof, and before convening the company general assembly meeting for the purpose of approving the balance sheet, the profit and loss accounts, it should dispatch to each holder of investment certificates, at his address, all the documents it sends to its shareholders.

Article (146)

	With regard to the investors' subscriptions the Fund shall issue securities in the form of nominal investment certificates with equal value.

	The Fund shall not issue bearer investment certificates except according to the terms and conditions set by the Authority's Board of Directors for each case separately, and on condition that the number of these certificates does not exceed 
25% of the total certificates issued.

	Each certificate shall be singed by two of the members of the Fund Board of Directors, to be designated by the Board together with the responsible managing director, and the certificates shall have coupons with serial numbers including the certificate's number.

	The Authority should be provided with the model of the investment certificate before offering it for subscription.

	The investment certificates shall not be issued unless their value is paid in fully in cash as per the issue price. These certificates entitle the investors to equal rights vis-à-vis the Fund, and their holders shall have the right to share the profits and losses resulting from the Fund's investments, each in proportion to the certificates he holds, and in accordance with the terms and conditions specified by the prospectus.

Article (147)

	The Fund's statute shall determine the maximum initial amount of funds to be raised through subscriptions and the investment certificates to be issued in return therefore, at a limit not to exceed ten times the original capital paid up by the founders of the Investment Fund Company.
	
Article (148)

	The Fund shall determine the nominal value of the Investment Certificate upon issuance. It should not be less than Ten Egyptian Pounds and not more than One Thousand Egyptian Pounds.

	The investment certificates may be produced either in a single certificate, or five denominations and their multiples.

Article (149)

	The Investment Certificates, which have been granted issuance approval, should be issued only once.

Article (150)

	The Investment Fund shall not issue investment certificates for in-kind payment or incorporeal payment.

Article (151)

	The Investment Fund shall file with the Authority, for approval thereof, a prospectus for the public offering of its investment certificates.

	The prospectus shall be prepared on the form provided for or approved by the Authority, and shall be supported with documents verifying the prospectus' information.

Article (152)

	The public offering prospectus prepared by the Investment Fund should include the following information:

1.	Name and Legal form of the Fund;

2.	Purpose of the Fund;

3.	Date and number of the Fund's License issued by the Authority;

4.	Duration of the Fund;

5.	Maturity and nominal value of the investment certificate;

6.	Number and denominations of the investment certificates;

7.	Name of the Bank authorized to receive subscription; 	

8.	The minimum and maximum limits of subscription to investment certificates;

9.	The period during which the subscription is made;

10.	Names of the Fund Board members and the Directors in charge of its administration;

11.	Names of the Auditors;

12.	Name of the Investment Manager and an adequate summary of his previous business experiences;

13.	Investment policies;

14.	The annual dividends and the capital gains distribution policy, and how the capital gains are dealt with and the liability extent of the certificate's holder at Fund liquidation; 

15.	An indication whether the value of the certificate could be redeemed before maturity, the cases of such redemption and the procedures and manner of re-selling it in accordance with the decisions of the Authority's Board of Directors in this respect;

16.	Regular disclosure of information;

17.	Remunerations of the Investment Manager;

18.	The financial burdens to be borne by the investors;

19.	Method of regular evaluation of the Fund's assets; and

20.	Any other information as considered necessary by the Authority.
	
Article (153)

	The Authority shall examine the prospectus and the attached document thereof, and shall certify it when the documents are complete.

	If the documents are incomplete, the concerned parties shall be notified within fifteen days from date of its submission in order to complete them.

	In all cases, the Authority shall take its decision within fifteen days from the date the documents are submitted to it or from the date of completing them. The parties concerned shall be notified with such a decision within one week from the date the decision was taken.

	The Authority's approval of the prospectus shall be nullified in case the subscription does not start within two months from the date of notifications therewith.

Article (154)

	Subscription to investment certificates shall be made through one of the Banks authorized therefore by the Minister.

	The period during which the subscription to publicly offered investment certificates is effected shall be for not less than fifteen days following which the offering may be concluded in case subscription is fully covered.

Article (155)

	Subscription to publicly offered investment certificates shall be proven by a voucher of subscription signed by the subscriber or his proxy and the representative of the concerned Bank receiving subscriptions including the following information:

1.	Name of the Fund issuing the certificates;

2.	Number and date of the Fund's license;

3.	Name of the Bank receiving the subscriptions;

4.	Name, address, and nationality of the subscriber to the nominal certificates and the date of subscription;

5.	Total value of certificates offered;

6.	Value and number of subscribed certificates numerically and in letters; and

7.	Cases and conditions of redeeming the value of the certificate before its maturity.

	If the investment certificates are not offered for public subscription, the voucher shall include - in addition to the foregoing information - the information contained in the prospectus as prescribed in article (152) of these Regulations.
	
Article (156)

	If the subscription period expires without full coverage of the offered investment certificates, the Fund may modify the amount being raised to be equal to the value of the certificates that have been subscribed to provided it is not less than fifty percent of the total value of the issued certificates. In such a case, all documentation of the Fund shall be changed and amended accordingly.

	The Fund's license shall be revoked if it is not amended according to the foregoing paragraph or if the number of certificates subscribed to is less than 50%. The subscriptions receiving Bank shall refund in full to the subscribers, upon claiming repayment, the amounts paid by them including the issue charges.

Article (157)

	If the applications for subscription to the certificates exceed the number of offered investment certificates, appropriation will be made among the subscribers each in proportion to his subscription.  Fractions resulting from the allocation process shall be rounded up in favor of small subscribers.

	In this case, the subscriber shall submit the voucher of subscription to the concerned Bank in order to certify the number of certificates appropriated for him and the amount paid for it, whereupon the remainder of the paid amount at subscription shall be refunded.

	The subscriptions receiving Bank shall not disclose the name of subscriber to bearer certificates whenever such a name is known to the bank through any other dealings.	

Article (158)

	The Fund may not redeem the value of investment certificates to their holders nor distribute to them any dividends in violation of the terms and conditions of the issue.

Article (159)
	If the prospectus indicates the right of certificate holder to redeem its value before maturity, he shall receive the value in which the certificate is issued or the last closing price thereof at the stock exchange whichever is less.

	The Fund shall not issue replacement certificates to those that have been redeemed.

Article (160)

	The value of securities held by the Investment Funds shall be computed, upon preparing the financial statements, on the basis of the market value thereof and provided that the Fund shall set aside at least 50% of the net increase of the market value of its assets as capital reserve.

	The proceeds of Fund liquidation shall be distributed among the Fund Company's shareholders, and the holders of investment certificates outstanding at the time of liquidation in proportion of the paid up capital of the Fund Company to the balance due to the holders of certificates on that date.

Article (161)

	The Fund Auditors shall have access to the Fund’s books and may request data and explanations, and inquire about assets and liabilities separately.  They are both required to submit a consolidated report and in the case of differences between them the report shall indicate and explain the aspects of differences and the view of each.

Article (162)

	The Fund shall be terminated in case the number of investment certificates is reduced to 50% of the total number of subscribed certificates unless the majority of certificate holders decide to continue the activities of the Fund in a meeting to be convened by the Fund Company and attended by a representative of the Authority.

	The Company shall invite for such a meeting within a week from the date on which the number of certificates is reduced to the limit referred to above, otherwise the Authority shall convene the meeting.

	In all cases, the meeting should be held within the week following the date of extending this invitation.

	The Fund, in all cases, shall be terminated and dissolved if the number of documents falls below 25% of the subscribed certificates.
	
Article 162 - B1 

	Direct Investment Funds shall not be governed by the same rules specified by this Executive Regulations for Investment funds with respect to investment percentages as well as venues of investment. 

SUBSECTION TWO

INVESTMENT MANAGER

Article (163)

	The Fund shall entrust an experienced entity to manage the investment of its assets. Such an entity shall be called Investment Manager.

Article (164)

	The Investment Manager should satisfy the following conditions:

1.	Be a joint-stock company incorporated in Egypt, and the paid up cash capital of which shall not be less than One Million Pounds, or to be a specialized foreign entity in accordance with what shall be determined by the Board of Directors of the Authority in this respect;

2.	The responsible persons who will conduct such business should have the experience and qualifications required for managing the Fund's investment;

3.	Members of the management company's board of directors, its directors and personnel, or the managing director of the foreign investment manager and members of his staff should not have previously been dismissed from service for disciplinary matters, nor prohibited from working as a stockbroker or any other profession, for disciplinary matters.  In addition, they should not have been convicted for any felony or misdemeanor in crimes related to honor or integrity, or by freedom restricting penalty in any of the crimes stipulated in Company, Trade, or Capital Market Laws, or declared bankrupt; and

4.	Payment of an amount of insurance the value of which, the rules and procedures governing deductions there from and completion thereof as well as the management of its proceeds and the method of its redemption shall be determined by the Authority's Board of Directors.

Article (165)

	It shall be unlawful of the Investment Manager to conduct such a business without being registered with the Authority in the register prepared for this purpose.

	Registry application shall be submitted on the form to be approved by the Authority and supported with the following documents:

1.	The company's incorporation contract and statute, or relevant documents for the foreign investment managers as defined by the Board of the Authority, as the case may be;

2.	Names of the board members and directors as well as their experiences and addresses;

3.	Business history of the company relating to management of Fund's investment;

4.	The receipt indicating payment of prescribed fees to the Authority; and

5.	Any other documents as required by the Authority.

	The Authority should make its final decision regarding the registration application within thirty days from the date of its submission or the date of completing the information and documents required by the Authority during such a period.

	The Investment Manager may contest to the Contesting Committee stipulated in the Law, the Authority's decision abstaining or denying his registration, or deleting or suspending such a registration.

Article (166)

	The Investment Fund shall conclude a management contract with the Investment Manager and shall provide the Authority with a copy of that contract before it is put into effect in order to ensure and verify conformity of its provisions with the Law and its executive decisions.

	The Authority shall provide the Fund with its views on the contract within fifteen days from the date of receiving the Fund's notification.

Article (167)

	The management contract of the Fund shall particularly include the following:

1-	Rights and obligations of the parties to the contract;

2-	The remuneration of the Investment Manager;

3-	Cases and procedures of redeeming investment certificate in case the prospectus specifies possibility of redemption;

4-	Identification of the representative of the Fund on the boards of directors and the general assemblies of the companies in the shares of which the Fund invests its assets;

5-	Cases of terminating and revoking the contract;

6-	  The relationship of the Investment Manager with the custodian bank for the securities held by the Fund in as far as such securities are concerned; and

7-	The cases and limits within which the Investment Manager shall be allowed to borrow from third parties for the account of the Fund and subject to the limit stipulated in Article (144).

Article (168)

	If an investment Fund is licensed to conduct other business in accordance with the provisions of article (140) of these regulations, the Investment Manager may, after the Authority's approval, assign the management of such business to a specialized entity. The Investment Manager shall be held responsible for such entity.

Article (169)

	The Investment Manager shall be prohibited to carry out the following actions:	

•	All prohibited actions on the part of the Fund whose investment being managed by him;

•	Using the Fund's assets in founding new companies, or buying securities of companies under liquidation, or in a state of bankruptcy;

•	Benefiting for himself or his directors or staff any gains or advantages from transactions carried out by him;

•	Having any affiliation of any kind with the companies being investing in their securities for the account of the Fund under his management;

•	Investing for his account or the account of his staff in the certificates of the Funds under his management;

•	Obtaining loans from unless allowed by the management contract to do so, and within the limits prescribed in the contract; 

•	Buying securities which are not listed on the Stock Exchange in Egypt, with the exception of government securities, and the securities of the Public Business Sector companies, nor buying securities which are not listed on a Stock Exchange abroad or which are listed on an exchange abroad but not supervised by a governmental regulatory commission;

•	Investing the Fund assets in the certificates issued by another Fund he is managing;

•	Disclosing or publishing incorrect or incomplete data and information, or withholding material information or data; and

•	Carrying out false transactions aiming at increasing stockbroker's commissions or other expenditures and remunerations.

Article (170)

	The Investment Manager shall keep independent and separate accounts for each Fund under his management and maintain books and records necessary for the conduct of business in addition to any other books and records determined by the Authority.  He shall provide the Authority with the documents and information it may request.

Article (171)

	The Investment Manager should manage the Fund's assets with utmost care and diligence and protect the Fund's interest in each transaction, act, or disposition including all necessary caution and hedging to market risks, diversifying the aspects of investment and avoiding any conflict of interests between the holders of investment certificates, the Fund's company shareholders and those affiliated to the Fund.

	Any stipulation or clause relieving or alleviating the Investment Manager from responsibility shall be considered null and void.

SUBSECTION THREE 

INVESTMENT FUNDS OF BANKS AND

INSURANCE COMPANIES

Article (172)

	Banks and Insurance Companies intending to carry out the activities of Investment Funds should submit license application to the Authority, including the following information, and supported with the following documents:

1.	Approval of the Central Bank of Egypt or the General Insurance Control Authority, as the case may be;

2.	Duration of the Fund;

3.	The amount allocated for the conduct of such a business, provided it is not less than Five Million Egyptian Pounds;

4.	The investment policies of the Fund;

5.	Manner of regular disclosure of information and data related to the Fund activities;

6.	Certificates' redemption system and their re-issuing;

7.	Management of the Fund and manner of estimating the management remunerations;

8.	Method of regular evaluation of the Fund's assets and the manner of determining the share of certificates;

9.	Cases of Fund's liquidation and governing rules;

10.	Other information as required by the Authority; and

11.	The receipt indicating payment of license fees to the Authority.

	The procedures, provisions and rules applicable to Investment Funds, which take the form of a joint stock company, shall apply to the licensing of such funds.
	
Article (173)

	The Fund's prospectus shall include an indication whether the assets of the Fund shall be invested in the securities owned by the Bank or by the Insurance Company, an indication of the issuer of these securities, and an indication that such investment shall be on the basis of the fair value of these securities as verified by the Auditor of the Bank or the Insurance Company. 

	The Bank or the Insurance Company shall guarantee the accuracy of the information contents of the prospectus.

Article (174)

	Subscription to the Investment certificates issued by the Investment Funds of Banks and Insurance Companies shall be made according to the procedures and provisions prescribed in Section One of this Chapter, provided that the prospectus includes an indication of the manner of certificates' redemption and the related conditions, terms and procedures thereof.

	The Bank or the Insurance Company shall maintain in the Fund's accounts adequate liquidity to meet redemption claims.

Article (175)

	The maximum amount of investors' subscription to the Investment Fund of the bank or the insurance company shall be twenty times the amount appropriated for the Fund as initial capital to conduct the business.

Article (176)

	The Investment Fund of the bank or insurance company shall not invest in other Investment Funds established by any of them, or in Investment Funds to be established or shared by banks or companies where the same bank or insurance company is a shareholder.

Article (177)

	The value of the redeemable certificate shall be determined on the basis of its share in the net value of the Fund's assets at the end of the working day of the week prior to redemption.

	The Fund may issue investment certificates replacing the redeemed ones, according to the Fund's statute, and within the maximum authorized limit therefore.

Article (178)

	The Fund assets, investments and activities shall be separated from the Bank or Insurance Company's assets.

	The Bank and the Insurance Company should keep the accounts of the Fund separate from the accounts of their other activities, or of clients' deposits, or the funds of owners of insurance policies, as the case may be.  The Bank or the Insurance Company shall maintain the books and records necessary for the conduct of the Fund's business.

	The Authority shall have the power to supervise the operations of the Fund and have access to information and documents concerning such operations, and to ensure that these operations are carried out in accordance with the provisions of the Law and Regulations as well as the decrees issued for their implementation thereof, and pursuant to the rules set forth for the Investment Funds taking the form of joint stock companies.

Article (179)

	The Bank or the Insurance Company shall provide the Authority with semi-annual reports on the Investment Fund's activities and the results of its business, and it should include the information disclosing actual financial position in accordance with the rules of disclosure set forth in Annex (2) of these Executive Regulations. These reports shall be audited by the Auditors who are appointed in accordance with the provisions of Articles (40) of the law.

	An adequate summary of these reports shall be published according to the provisions of Article (6) of the Law.

Article (180)

	The Bank or the Insurance Company shall entrust the management of Fund's investments to an experienced entity according to the rules and provisions of these Regulations. The Bank or the Insurance Company shall be accountable for the mismanagement of such entities that may cause harm to the Fund.

Article (181)

	The securities in which the Fund invests its assets shall be deposited in the same bank owning the Fund or any other bank under the supervision of the Central Bank of Egypt.

	The Investment Manager in charge of the management of the Fund's investments shall submit to the Authority adequate information on such securities to be certified and endorsed by the Bank or the Insurance Company, and using the Form provided for or approved by the Authority.

Article (182)

	The investment certificates issued by the Funds of the Banks or Insurance Companies shall not be listed or traded on the Stock Exchanges.

Article (183)

	Subject to any special provision prescribed in this Subsection, the provisions and procedures governing the Investment Funds Companies stipulated in the Law and these Executive Regulations shall apply to the Investment Funds established by Banks and Insurance Companies.