Chairperson of the Egyptian Financial Supervisory Authority (EFSA) Sherif Samy said that the EFSA intends to reconsider the value of the fine for sending financial statements after the specified legal period. According to the Capital Market Law (no. 95), which was passed in 1992, the value of the fine amounts to EGP 2,000 per working day after the deadline has passed.
Samy told Daily News Egypt that these fines are insignificant after 20 years of the issuance of the law.
The proposed amendment will be combined with effective amendments implemented by the stock exchange to registration rules in the executive regulation. The amendments include freezing the company’s shares while trading, if the company was 45 days late in sending its financial statements.
This will be an alternative to the previous rule, which stipulated that the shares of companies who did not send in their financial statements for two consecutive periods be suspended.
Samy pointed out that EFSA will start amending the fine’s value following parliament’s approval on the Capital Market Law amendments. The amendments include the organisation of sukuk, the establishment of a securities firms union, and organising acquisitions and purchase offers. Amending the value of the fine requires the parliament’s approval because it is considered as an amendment to the law itself, not to its executive regulation.
Samy disclosed that the Minister of Investment Dalia Khorshid sent a collateral warranties executive regulation draft to the State Council Court for review, to make sure that the regulation is compatible with the law and its wording.
Samy expected the State Council to complete reviewing the executive regulation in September or October, and that it would be re-sent to the minister of investment before the final approval.
He had previously announced a number of items related to the collateral warranties law, such as determining creditors of multi-financing or credit parties, other than banks and financial institutions. This includes—for example—companies and entities licensed to practise leasing, and non-governmental organisations (NGO) licensed to practice micro-finance.
Samy expected the draft law that regulates leasing activity and factoring within two weeks, before discussing it with the capital market community, namely companies that practise the activity, and legal consultation offices that are related to economic activities.
Samy explained that the law’s final touches are underway, mainly referring to financial reports, tax dealing, and leverage of companies practising both leasing and factoring activities.