Financial market legislation has defined the Charitable Investment Fund as an investment fund that solely distributes the profits and returns resulting from its investments to spending on social or charitable purposes, through registered non-governmental associations or organizations, government agencies, or charity affiliated bodies.
As for those who invest in the fund, i.e. finance the fund by purchasing its certificates, concerned with the social and charitable purposes sponsored and funded by the fund regarding its subscription prospectus. These investors may be individuals, companies, or other entities.
The organization of charitable investment funds requires management by an authorized investment manager from the General Financial Regulatory Authority. The holders of these education fund certificates meet within the certificate holders’ group meetings to follow up the results of the fund’s work.
This is a non-governmental fund that operates according to the financial market legislation, and its financing comes as an option from those interested in developing and supporting various educational services. The fund’s system is to finance various educational services related to the Education sector in Misr ElKheir Foundation such as provision of educational opportunities for children and school dropouts, establishment and rehabilitation of general and technical education schools, contributing to finding job opportunities and reducing unemployment, and sponsorship for talented excellent students through internal and external scholarships. All of these activities primarily depend on the resources available in the fund from its investments, and on annual priorities decided by the Board of Directors, which includes members from different specialties, the majority of whom are independents, and hence ensure sustainability.
The fund operates in accordance with the legislations regulating the financial market, which is supervised by the Financial Regulatory Authority, to ensure proper implementation and compliance. These legislations include that management of the fund’s investment portfolio must be entrusted to a management company licensed to practice fund management activity from the authority body through a contract between the fund’s board of directors and the management company. The management company makes investment decisions, follows up on investments and diversifies them in order to achieve appropriate returns on investment under acceptable risks, while operating with utmost care and frugality. All operations are implemented with adherence to the investment policies established for the fund in terms of investment tools, concentration rates, allowed liquidity, etc. The fund’s board of directors has the authority, if sees reason at a later stage, to terminate the contract with the investment manager company, and contract another company to manage the investment funds.
Certainly, the Education Fund will be open, meaning that its certificates can be periodically purchased through bank branches contracted for this purpose, allowing new investors or holders of certificates in the Fund to increase investments allocated to the fund.
All parties invest their money and the return is directed to serving the charitable and social purposes specified in the fund’s prospectus. The difference is that the founders must put the capital, which is 2% of the total amount of the fund, and at least 5 million Egyptian pounds. Therefore, the minimum 5 million EGP, is sufficient to reach subscriptions up to 250 million pounds. The founders are also the ones who choose the fund’s board of directors, from which the general assembly of the fund is formed annually to approve the audit report and the financial statements, and the release of the board of directors’ members.
Subscription to investment certificates is considered acceptance by the subscriber “certificate holder” of the fund’s articles of association, and what was stated in the prospectus, especially limiting the distribution of profits and returns resulting from the investments of the fund until it expires on expenditure on social or charitable purposes. This is done through associations or non-governmental organizations, or government agencies or bodies that supervise it or affiliated to it and related to charitable activities, and the approval of the subscriber to form and join the certificates holders group.
By virtue of the legislation regulating the financial market and investment fund activity, there are periodic financial statements and an audit report that must be made available to certificates holders. Likewise, the fund’s board of directors issues an annual report with its activities, and there are meetings that are conducted for certificates holders’ group. Both the report and the certificates holders’ group meetings periodicity can be determined in the articles of association or the prospectus; it may be annually or quarterly, and the fund will have a website on the internet that includes everything related to its charitable and social work activities and its financial statements.
This group consists of certificates holders a group whose main purpose is protection of the common interests of its members. The group specializes in following up on the fund’s commitment to implement articles of the prospectus regarding the fund’s investment aspects, as well as aspects of spending its profits and returns, and in particular considering the proposals of the Board of Directors in the following topics:
1- Amendment of the investment policy of the fund taking into account the charitable nature of the fund.
2- Agreement to change the investment manager.
3- Amendment of the rules of distribution of the fund’s profits in the charitable or social fields, and the related beneficiaries thereof, taking into account the nature of the fund.