FRA Extends Compliance Period for P

On 3 January 2019, Decision No. 185 of 2018[1] passed by the Board of Directors of the Financial Regulatory Authority ("FRA") on 16 December 2018 was published in the Egyptian Gazette. The new decision extends the grace period given to private holding companies under FRA Decision No. 105 of 2018 (“Decision 105/2018”)[2] – which contains the regulations for companies that operate in the field of establishing companies that issue securities or in increasing their capital (“private holding companies”) – for six additional months starting 1 January 2019. Decision 105/2018 had mostly deferred to applicable rules under the Capital Market Law (“CML”), its Executive Regulations, and other relevant FRA decisions, including decision No. 53 of 2018 on the licensing of non-banking financial activities. Importantly, Decision 105/2018 also provided the procedures for the exit of companies that are no longer considered to undertake the activity of private holding following an amendment of the definition of said activity under the CML. The amendment passed in March 2018 eliminated from the scope of private holding companies – requiring prior FRA licensing – companies that own more than half the capital of five or more joint stock companies or partnerships limited by shares, or that had control over the board of five or more joint stock companies or partnerships limited by shares. Prior to the March 2018 amendment, said companies were considered to be private holding companies regardless of the type of activity undertaken by the five subsidiary companies. FRA Decision 105/2018 gave companies a grace period until 31 December 2018 to comply with the above in addition to the other regulations contained therein. This deadline has now been extended for six additional months. For detailed coverage of FRA’s regulations for private holding companies under Decision 105/2018, please refer to our Egypt Legal Update Issue of September 2018, Week 1.   [1] FRA Board of Directors Decision No. 185/2018 extending the compliance period for companies that operate in the field of establishing companies that issue securities or in increasing their capital, Egyptian Gazette, Issue No. 3, 3 January 2019. [2] FRA Board of Directors Decision No. 105/2018 on the regulations for companies that operate in the field of establishing companies that issue securities or in increasing their capital, Egyptian Gazette, Issue No. 192, 28 August 2018.