Back to the complete issue
Wednesday, 28 September 2016

EFSA issues new corporate governance regulations, more in the works

BROKERAGE FIRMS get new corporate governance rules. The Egyptian Financial Supervisory Authority (EFSA) has enacted new corporate governance regulations for brokerage houses, which according to its head Sherif Samy, aim to strike a balance between strengthening oversight and easing restrictions on smaller firms, Al Shorouk reports. The new regulations, which were out on Sunday 25 September, will come into effect on Monday with a grace period lasting until 30 April 2017 in certain cases. You can read the full amendments in Arabic here (pdf). These amendments include:

  • Brokerages cannot rely on the same independent auditor for more than six years;
  • Companies are no longer obliged to issue dividends annually, with decisions on that left to shareholders;
  • Auditors are not required to issue annual reports on corporate governance;
  • Boards are no longer obliged to form committees purely to issue an annual report to EFSA.

More legislation and regulation is in the works: EFSA isn’t the only one keeping busy, as the General Authority for Investments and Free Zones (GAFI) and the Justice Ministry have been reviewing business and investor-related legislation, AMAY reports. These include the Disputes Resolution Act, which seeks to reduce the time to settle disputes between investors, with provisions being set out to enforce nondisclosure agreements. The much-touted Bankruptcy Act is also being reviewed (just don’t hold your breath). The law would repeal prison sentences in cases of bankruptcy and develops a mechanism to restructure bankrupt companies. And a draft Trademarks Act which expedites securing intellectual property rights is also in the works.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.