CBE Issues Detailed Rules for the A

On 26 February 2019, the Central Bank of Egypt (“CBE”) issued new banking supervision instructions titled “regulation for (IFRS9) implementation”[1] which banking community has been in anticipation of since the CBE’s issuance of a circular in January 2018 obligating banks operating in Egypt to prepare their financial statements according to the international financial standard known as IFRS9.[2] The previous CBE decision stipulated that the new standard should be applied as of January 1, 2019 for banks whose fiscal year ends in December of each year and as of July 1 for banks whose fiscal year ends in June of each year. It is worth noting that the new standard – already in application in other countries around the world since early 2018 – relates in essence to the valuation of financial instruments, and thus directly affects the calculation of reserves that banks must maintain in accordance to recognized banking, accounting and legal fundamentals. The issuance of the IFRS9 circular last year had caused a stir among banks. This is because the original circular had not provided sufficient elaboration and technical details that would allow the standard to be efficiently adopted, especially for foreign bank subsidiaries and branches operating in Egypt who were indeed required to apply the new standard in accordance to their original jurisdictions. For these reasons, the issuance of the detailed implantation regulations is likely to be welcomed by the banking community.   [1] CBE Circular dated 26 February 2019 on the regulation for (IFRS9) implementation, available through this link (in Arabic). [2] Please refer to our Egypt Legal Update Issue of February 2018, Week 2 for more details on this topic.