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The Financial Supervisory Authority cancels the opening of accounts in the stock exchange through agencies


Dr. Muhammad Farid Saleh, Chairman of the Board of Directors of the Financial Supervisory Authority, issued Resolution No. 151 of 2022 amending the Authority’s Board of Directors Resolution No. 61 of 2018, regarding measures to enhance the protection of the accounts of dealers with companies operating in the field of securities.

The first article of the decision, of which “Youm7” obtained a copy, stipulated that the texts of the paragraphs (Article Two – Paragraph One), (Article Five – Paragraphs Three and Fifth), of the Authority’s Board of Directors Decision No. 61 of 2017 regarding Procedures to enhance the protection of the accounts of dealers with companies working in the field of securities.

(Article Two – Paragraph One): All securities brokerage firms, securities portfolio formation and management firms, companies and entities licensed to act as custodians are obligated not to conclude any contracts or open accounts for their clients who are natural persons except through the client directly, and agencies are not considered Issued to any person, regardless of their legal form, in opening customer accounts, other than foreign and Egyptian customers abroad. They may authorize others to open their accounts with the aforementioned companies and agencies if the customers’ residence address is abroad, provided that the power of attorney is certified by the competent Egyptian authorities abroad.

The aforementioned companies and entities may also – and after the approval of the Authority – use modern and innovative technological technologies to support and facilitate the conclusion of any contracts or the opening of accounts for their clients, without prejudice to the applicable rules regarding combating money laundering and terrorist financing and verifying the identity of clients.

(Article Five – Paragraph Three): The Central Depository and Registry Company is obligated to obtain a declaration signed by the company or entity requesting the payment of profits or returns from the securities owned by its clients to its account in accordance with the provisions of the previous paragraph, provided that the declaration includes the quantity of the purchased or guaranteed securities in accordance with the purchase system With the margin required to pay profits or returns on it to each of its clients, and that its contract for margin purchase with the client or any appendix to it includes the right to exchange these profits and returns on securities to reduce the indebtedness owed by him in accordance with the margin purchase system.

(Article Five – Paragraph Five): The Central Creativity and Registry Company is obligated to obtain an acknowledgment signed by the custodian requesting the payment of profits or returns from the securities owned by its clients in accordance with the provisions of the previous paragraph, that the securities custody contract with the clients for which profits or returns are required to be paid or any supplement It includes the entitlement of the custodian to disburse these profits or returns.

The second article states that to the Authority’s Board of Directors’ Decision No. (11) of 2017 referred to in clause No. “4” of the first paragraph of Article Five, and Article No. Six bis, the text of which is as follows: (Article Fifth – First Paragraph Clause 40): 4- Any other method estimated by the Authority based on the requests received by the Authority.

Article VI states bis: Joint stock companies and partnerships limited by shares may, according to the cases assessed by the Authority, complete the procedures for depositing their shareholders’ shares with the Central Securities Depository and Registry Company on their behalf, under a special official power of attorney from the shareholder allowing them to do so.

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