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Process of CG in Egypt Mohamed Omran Vice Chairman Cairo & Alexandria Stock Exchanges December, 13 th 2006.

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Presentation on theme: "Process of CG in Egypt Mohamed Omran Vice Chairman Cairo & Alexandria Stock Exchanges December, 13 th 2006."— Presentation transcript:

1 Process of CG in Egypt Mohamed Omran Vice Chairman Cairo & Alexandria Stock Exchanges December, 13 th 2006

2 Process of CG in Egypt The First ROSC Exercise (2001) Issuing New Listing &Disclosure Rules (2002) The Second ROSC Exercise (2003) Establishing The Institute of Directors (2004) Issuing the first Corporate Governance Code (2005)

3 Process of CG in Egypt The First ROSC Exercise (2001) The First step was in 2001 when the World Bank published its first assessment of corporate governance system in Egypt

4 Process of CG in Egypt The First ROSC Exercise  The assessment highlighted a number of areas where Egypt ’ s corporate governance system needs strengthening in major six headings, Including:  Disclosure of ownership and control structures  Disclosure of financial and non-financial information  Training for regulators and the private sector  Role and effectiveness of shareholders ’ meetings  Practices of boards of directors  Professional conduct of auditors.

5  August 2002 : The implementation of new Listing, Delisting and Disclosure rules.  Focusing on the concept of transparency through a set of obligations concerning the disclosure of significant material information. Issuing New Listing & Disclosure Rules

6 Such obligations include but not limited to, that companies should notify CASE with :  The board of directors (BOD) composition and its key officers resumes and ensure that no conflict of interest exist with any of the BOD members.  Business contracts between the company and its directors, managers, shareholders and related parties.  Organizational structure of companies.  Detailed capital structure including percentages of shareholders ownerships. Listing, Delisting & Disclosure Rules (cont ’ d)

7  All transactions between the issuer and any of its shareholders.  The existence of an audit committee, the names of its members and their duties.  The General Assembly Meetings.  The internal procedures and regulations undertaken by the issuer, which do not permit any insider trading, i.e. to buy or sell securities of the company based on insider information.  The annual and quarter financial statements. Listing, Delisting & Disclosure Rules (cont ’ d)

8 CASE Rules concerning Financial Statements Dissemination  The issuer shall review and prepare the financial statements according to the Egyptian Generally Accepted Accounting Principles which follow the International Accounting Standards.  Publish a “ Board Report ” that provides an overview about the company activities during the year.  Deliver to CASE and the CMA a copy of the annual financial statements whenever approved by the company's BOD with the Auditors Report by a maximum of 90 days from each FY end.  Deliver a copy of the quarterly financial statements whenever approved by the company's BOD with the Auditors Report by a maximum of 45 days from the end of each quarter. Listing, Delisting & Disclosure Rules (cont ’ d)

9 CASE Rules concerning Financial Statements Dissemination  Publish the issuer ’ s annual & semi-annual financial reports, the related footnotes, the Auditor's Reports and the CMA comments in two daily widely circulated newspapers, one of which, must be in Arabic.  Ensure all interior procedures that guarantee that there is no information leakage, specifically designated to financial analysts, financial institutions or other parties, before disclosing them to the public.  Immediately notify the Exchange with any material events occurred, such as new bonds issuance, material changes in shareholders ’ structure, purchase of treasury stocks, etc.  Directors and senior managers of the issuer must inform the Exchange of their trading on the company ’ s shares, before the execution process. Listing, Delisting & Disclosure Rules (cont ’ d)

10 Impact of CG on Number of Listed Companies vs. Market Cap (1997- Nov 2006)

11 The Second ROSC Exercise  The World Bank second assessment was Published in  It highlighted a number of major reforms, mostly incorporated in new stock exchange listing rules, as well as, identifying several key next steps, including:  Building a Center for Directors that can help develop a Code of Corporate Governance.  Focused enforcement of the new listing rules and disclosure provisions.  Implementation of legislative reform to bring the policy framework into greater compliance with the OECD Principles.

12 Establishing the Egyptian Institute of Directors A decree issued by the Minister of Foreign Trade in Two boards structure: (i) Board of trustees; and (ii) Executive Board.

13 Process of CG in Egypt Release of Egypt's Code of Corporate Governance in Release of the Corporate Governance Manual for State- Owned Companies in 2006.

14 Currently Reviewing the current Listing, Delisting & Disclosure Rules


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