Chairman of Mubasher Securities Trade and Al Thamarat Charity Association Ehab Rashad said the association is preparing to launch a charitable fund to benefit from new regulations from the Ministry of Investment in January, which control the issuing of the capital market bylaw.
Rashad said the association is waiting the Egyptian Financial Supervisory Authority (EFSA) to issue the basic model of charitable investment funds to draw up trading controls and to transfer ownership of documents outside the stock exchange to begin establishing the fund.
The minimum size of the fund will be determined by the regulations to be issued by EFSA.
Al Thamarat is based in Alexandria and conducts charity work valued at EGP 500,000 per year ranging from providing food and medicine, helping women and girls to marry, helping orphans, and building mosques.
Mubasher will run the fund for free, as part of its social responsibility, once established. Rashad said the association plans to receive submissions for the fund IPO at branches of Qatar National Bank (QNB).
The statute of the fund will depend on the employment of at least 90% of its investments in debt instruments such as treasury bonds and bills. The remaining 10% will be invested in stocks to minimise risk and ensure steady yield used to finance the activities of the association, whilst maintaining the association’s capital.
The bylaw defines charitable investment fund as private equity fund or a real estate investment fund. The profits from its investment must only be distributed to support social or charitable purposes conducted by associations, government organisation, or their associated charity institutions.
EFSA Chairman Sherif Samy told Daily News Egypt the main statute of charitable investment funds is ready for approval at the next board of directors meeting and it stipulates involvement of experienced financial institutions by at least 2%.
Charity organisations are not the founding core of charitable investment funds but rather the recipient of profits realised by the fund. The statute of charitable funds would require a minimum capital of at least EGP 5m.