CAPITAL MARKET LAW
No. 95 for 1992                                     

CHAPTER ONE

ISSUANCE OF SECURITIES

Article (1)

	The capital of the joint‑stock company, and the shareholding in the partnership limited by company shares, shall be divided into nominal shares of equal value. Companies may issue bearer shares within the limits and in accordance with the rules, procedures and conditions specified by The Executive Regulations. The bearer shares shall not have voting power.  

	The nominal value2 of the share shall be specified by the company statute and shall not be less than Five Egyptian Pounds (LE. 5) and not more than One Thousand Pounds (LE. 1000). The companies, which are already established at the time of enactment of this law, shall not be governed by such a provision.

	The share shall not be divisible.

	In case of capital increase, the company may issue the new shares with a different value than previous issues. The new shares shall have the same rights and obligations of the previous issues.

	The Executive Regulations shall stipulate such information, which the shares must include, and specify the manner of replacing lost or damaged shares and what may ensue to these shares when the statute of the company is amended.

	The Executive Regulations shall stipulate the rules governing the offering of shares for public subscription.
	
Article (2)

	Every company before issuing securities should notify the Authority. If the Authority does not object within three weeks, the company may proceed with the issuing arrangements. This is without prejudice to any other provision of this law. 
	
	The Executive Regulations shall define the information contents of the notification and the documents to be attached thereto.    

Article (3)

	The value of shares, which are issued for payment in kind, or in case of merger, should be equal to the value of the in- kind payment, or the merged assets, as defined by the relevant valuation committee. The proponents to this valuation shall have the right to contest to the Contesting Committee stipulated in Chapter Five of this Law and subject to the rules and procedures stipulated in the Executive Regulations.

	The proponent to the in- kind payment may, however, pay the difference in cash or he may withdraw.  

	In all cases, issuance of such shares shall not be permitted until the date of contest has elapsed, or the contest has been ruled.   
	
Article (4)

	No offer of securities by any company, including Public Business Sector Companies, and Public Sector Companies, shall be made for public subscription without a prospectus to be filed with and certified by the Authority, and publishing in two widely circulated daily morning newspapers, one of which at least should be an Arabic newspaper.

	The prospectus should be prepared according to the forms provided by the Authority.

Article (5)  

	The prospectus of a company at incorporation should disclose the following information: ‑
1.	Purpose and duration of the company.
2.	Issued and paid up capital of the company.
3.	Characteristics of the shares being offered and the terms of offer.
4.	Names of the founders, the capital subscribed by each and the payment in kind, if any. 
5.	The company's plan for the use of proceeds of sale and its expected results.
6.	Places where the certified prospectus could be obtained. 
7.	Any other information as defined by the Executive Regulations.

	Other types of prospectus should, in addition to the information stipulated in the preceding paragraph, disclose the following information: 

1.	Business history of the company.
2.	Names of the board members, directors and responsible officers and their experiences.
3.	Name and ownership percentage of each shareholder of nominal shares who owns more than five percent of the company's shares.
4.	A brief of audited financial statements of the last three years, or for the period from the date of company incorporation whichever is less; prepared in accordance with the disclosure rules stipulated in the Executive Regulations and using the forms provided by the Authority.

Article (6)

	Every company offering securities for public subscription is required to provide the Authority with its semi‑annual activity and progress reports, disclosing data and information revealing its actual financial position. 

	The company's balance sheet and other financial statements should be prepared in accordance with the accounting standards and auditing principles as specified, or referred to, by the Executive Regulations.

	The company should notify the Authority a month prior to the general assembly meeting of its balance sheet and other financial statements as well as reports of the board of directors and that of company's auditor.

	The Authority may examine the aforementioned documents, or entrust other specialized agencies to carry out such an examination. It shall notify the company with its remarks accordingly specifying necessary amendments to these documents. If the company does not comply with such a notification, the Authority shall publish its remarks and required amendments at the expense of the company and in accordance with the procedure stipulated in the following paragraph.

	The company shall publish an adequate summary of its semi‑ annual reports and annual financial statements in two daily morning and widely circulated newspapers, one of which at least is an Arabic newspaper. 

	Every company should disclose immediately any material information which would affect its business or its financial position and publish an adequate summery of this information in two daily morning and widely circulated newspapers, one of which at least is an Arabic newspaper.

Article (7)

	The company and its auditors shall provide the Authority with the information and documentation it may require verifying the contents of the prospectus, the periodic reports and the financial statements.  

Article (8)

	Any shareholder who wishes to acquire more than ten percent of the nominal shares of any company offering its shares for public subscription shall notify the company at least two weeks before the transaction.

	The company shall inform every shareholder, who owns no lees than one percent of its shares, of this intention within one week of receiving the notification.

	Violation of the provision of paragraph one of this article shall result in the cancellation of the transaction. This is without prejudice to the questioning of the violator of this provision. 

	The provisions of the preceding paragraphs shall apply in case a board member, or any of the employees of the company wishes to acquire more than five percent of the nominal shares of the company.	

	The stipulated procedure in this article should be followed before any transaction results in the increase of the ownership percentages indicated in paragraphs one and four.

	The Executive Regulations shall stipulate the rules governing such transactions and the procedures governing the notification and announcement processes.

Article  (9)

	A shareholder cannot represent in the general assembly, by way of proxy, a number of votes more than the limit stipulated in the Executive Regulations. 

Article  (10)

	The Board of the Authority, upon a petition on substantive reasons by a number of shareholders who own no less than five percent of the company shares, may suspend, after verification, the decisions of the general assembly of the company that are taken unfairly in favor of a given group of shareholders, or causing harm to them, or unfairly bringing about a benefit to the members of the board of directors or others.

	The concerned shareholders should appeal to the arbitration council, which is defined in chapter five of this law, to request the nullification of the decisions of the general assembly, within 15 days from the date of the suspension decision. In case this action is not taken within such a period, the suspension decision shall be nullified.	

Article  (11)
	Without prejudice to the tax exemptions set forth for shares of companies listed on the stock exchanges at the date of enactment of this law, the shares on the list which is specified in item A of Article 16 of this law shall be exempted from stamp duties and the dividends of these shares shall be also exempted from the general income tax.

	Capital gains shall be subject to a two percent tax, to be paid by the seller. The collection of this tax shall be governed by regulations to be issued by the Minister of Finance in agreement with the Minister of Economy.  

Article  (12)

	Issuance of bonds, financial notes and other securities, whether nominal or bearer, shall be subject to the approval of the company's general assembly and according to the rules and procedures stipulated by the Executive Regulations. The general assembly approval should include the return on issued bonds, financial notes and other securities, as well as the basis of calculating that return, regardless of the limits stipulated in any other law. 

	The offering of bonds, financial notes and other securities to the public will be subject to approval by the Authority.

Article  (13)  

	Holders of the same issue of bonds, financial notes and other securities, may form an association to protect the common interest of its members, and shall have a legal representative from amongst its members, to be selected and dismissed according to the provisions and rules set by the Executive Regulations. He must neither have direct or indirect relations with to the company, nor a conflicting interest with the members of the association.

	The association representative shall act to protect the common interest of the association versus the company and others as well as represent the association before the courts within the duties assigned to him by the association in a valid meeting.

	The Authority should be notified of the formation of such an association and the name of its representative, as well as receive copies of its resolutions.    

	The Executive Regulations shall stipulate the rules and procedures regarding convening the association's meetings, who is vested to convene the meeting, the venue and the voting process, as well as the relation between the association and the company as well as with the Authority.
	
Article  (14)                            

	Without prejudice to the tax exemptions set forth for bonds and financial notes issued by companies listed on the stock exchange, at the date this law is enacted; the bonds, financial notes, and other similar securities ‑irrespective of the issuing entity ‑ which are listed on the stock exchange list specified by item (A) of Article 16 of this law, shall be exempted from stamp duties. Returns on such securities shall be also exempted from movable capital tax and the general income tax.

	Capital gains of any of these securities shall be subject to a two percent tax to be paid by the seller. The collection of such a tax shall be governed by regulations to be issued by the Minister of Finance in agreement with the Minister of Economy.