EFSA Requires 21 Day Notification P

Following in the footsteps of a recent Ministry of Investment decision,[1] the Egyptian Financial Supervisory Authority (“EFSA”) issued a decision on 30 May 2017[2] amending its listing and delisting rules with the effect of requiring listed companies to publish a summary of their Board of Directors meeting, financial statements, and audit reports at least 21 days prior to the date of a general assembly meeting.

Background

As part of the overall efforts by the Egyptian government to promote investment in Egypt, several bodies have been focused on increasing Egypt’s ranking on the World Bank’s Doing Business Report. The Doing Business Report is an instrument devised by the World Bank to compare 190 countries in terms of the ease of doing business. As explained in our ELU Issue of May 2017 Week 5, a recent Ministry of Investment decision (No. 94 of 2017), amended the executive regulations of the Companies Law[3] to extend the timeframe for sending notification of general assembly meetings to 21 rather than 15 days. The measure is in recognition of a corporate governance principle aimed at protecting the rights of shareholders and minority investors, as sending notifications of shareholder meetings too close to the time of the meeting could hinder the ability of shareholders to exercise their right of being well informed of, and able to easily participate in, the decision-making process.

The EFSA Decision

Eight days following the Ministry of Investment decision, EFSA issued a similar decision on 30 May replacing Article (35) of the Listing and Delisting Rules for Securities Companies on the Egyptian Stock Exchange.[4] The Article obligates companies listed on the Egyptian Stock Exchange to publish the following material (i) a summary of its Board of Director’s meeting, (ii) the annual financial statements along with any complimentary annotations, and (iii) the auditors’ report along with any EFSA comments, in two daily newspapers. Prior to the most recent amendment, the publication of that material had to be made at least 15 days prior to a shareholders’ meeting. After the recent amendment, that timeframe will now be 21 days.   [1] Ministry of Investment and International Cooperation Decision No. 94/2017 amending certain provisions of the Executive Regulations of the Companies Law No. 159/1981 Issued by Decision No. 96/1982, Egyptian Gazette, Issue No. 17 (cont.) (c), 22 May 2017. [2] EFSA Board of Directors’ Decision No. 76/2017 amending its Decision No. 11/2014 on the Rules for Listing and Delisting of Securities on the Egyptian Stock Exchange, Egyptian Gazette, Issue No. 148, 2 July 2017. [3] Law No. 159/1981 on Joint Stock Companies, Partnerships Limited by Shares, and Limited Liability Companies, Official Gazette, Issue No. 40, 1 October 1981. [4] EFSA Board of Directors’ Decision No. 11/2014 on the Rules for Listing and Delisting of Securities on the Egyptian Stock Exchange, Egyptian Gazette, Issue No. 21 (cont.) (a), 28 January 2014.