FRA Decision on Board Member Criter

The Financial Regulatory Authority (“FRA”) recently issued decision No. 10 of 2019 (the “Decision”), amending board member criteria in non-banking financial (“NBF”) companies.[1] The Decision revokes a provision prohibiting the appointment of individuals repetitively accused of major breaches to any of the laws regulating NBF activities within the previous three years (unless acquitted by court) as board members in companies subject to FRA supervision. It also revokes the definition of “repetitive accusation” and “major breaches.” However, the Decision revokes these provisions only as stated in FRA Decision No. 162 of 2018. It does not revoke similar provisions in FRA Decisions No. 85 of 2018 (applicable to NBF companies) or 11 of 2014 comprising the Listing and Delisting Rules (as amended by FRA Decision No. 82 of 2018 with board requirements for listed companies). Accordingly, individuals who have been repetitively accused of major breaches to laws regulating NBF activities during the three years preceding their appointment could still nevertheless be prohibited from becoming board members, unless acquitted by court, as per the two unrevoked decisions. In light of this, the purpose of issuing Decision No. 10 of 2019 becomes unclear.   [1] FRA Board of Directors Decision No. 10/2019 amending certain provisions of FRA Decisions No. 85 & 162/2018, available through this link (in Arabic).