Executive regulations of Movable Guarantees Law to be submitted within 1 month

The executive regulations include technical measures, such as organising the electronic registry of the guarantees and risk management, says EFSA chairman

The Egyptian Financial Supervisory Authority (EFSA) began drafting the executive regulations of the Movable Guarantees Law, EFSA's chairman Sherif Samy said.
He further noted that he expects the regulation to be submited to the Minister of Investment within a month for discussion and approval.
The law facilitates the acquisition of credit facilities or funds in exchange for providing guarantees, Samy told Daily News Egypt.
Among the most prominent instruments that constitute guarantees are the debts owed to the party that will obtain the fund. Other instruments can be used, such as bonds, deposits, equipment, agricultural crops, real estate, patent copyrights, or trademarks.
Samy added that the executive regulations will organise the technical procedures of the process, such as the electronic registry of all the movable guarantees. The regulations will also determine the procedures controlling the parties and companies responsible for operating the electronic registry.
The regulations also include the steps of registering movable guarantees in the commercial record, as well as the ways of using those guarantees by the debtors to obtain the funds.
The regulations will manage the possible risks that may be faced by the owner of the guarantee in cases like death, bankruptcy or any damages to the assets.
He added that this law "will play an important role in providing funding to companies, especially small and medium-sized companies".
On charity investment funds, Samy said the authority has not received any request to establish any of those funds, highlighting that some companies contacted the EFSA to inquire about these funds.
Managing Director of Mubasher for Securities and chairman of Al Thamarat Ehab Rashad said he had contacted EFSA to inquire about the establishment of charity investment funds.
EFSA told Mubasher there are no restrictions on the capital of those funds, as long the estimated minimum exceeds EGP 5m, which means that the company can start with fixed capital and then increase it, according to Rashad.
He explained that his company has launched talks with several parties and individuals to collect EGP 5m to establish the company, which in turn will create the fund.
Rashad noted that he had discussed the establishment of the fund with the executive management of the parent company to ensure its contribution, noting that the later expressed its willingness to contribute. He added that he will address the parent company again at the time of launching the fund.
Mubasher will allow the fund the right to apply the "Comprehensive Charity Programme", which allows the fund's investors to follow up on the fund's inflow's, in an effort to ensure transparency.
According to the Capital Market Law, a charity investment fund is defined as a private fund or real estate investment fund, in which profits from investment are spent on social or charity purposes carried out by associations, registered private institutions, government agencies, or government-linked charity agencies.