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Wednesday, 10 October 2018

FRA lays claim to PE industry

** #8 REGULATION WATCH- FRA lays claim to PE industry: The Financial Regulatory Authority (FRA) has released licensing guidelines for private equity firms and funds, Youm7 reports. Conditions for a license to run a private equity firm or fund include minimum capital of EGP 10 mn and a firm’s general partner holding a minimum stake of 0.5% of the value of any fund it raises. The GP must also have 3-5 years of experience working in the financial sector, depending on the level of academic training, can never have previously filed for bankruptcy, and must have a clean criminal record. If our reading of Youm7 is correct, the guidelines bar the managers of PE firms from making personal gains from a fund’s investments, suggesting PE professionals may not be allowed to personally invest in their own transactions. Let us know if we’re off here and you have the inside scoop?

Background: The Investment Ministry had issued in June a directive making the FRA the primary regulator for the private equity industry.

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