الهيئة العامة للرقابة المالية

 Dr. Mohamed Farid – FRA Chairman:

• We are committed to sustaining reforms aimed at deepening the non-banking financial sector and fostering confidence.
• Our objective is to support the government’s efforts in achieving the goals of economic development plans, particularly in terms of growth and employment.
• Local and international partnerships are crucial for integrating global practices and standards.
• We collaborate as a team to promote growth, employment, and market development, ultimately serving the broader objectives of economic development
• Encouraging higher savings will provide the necessary funding for investments and financing growth initiatives, ultimately driving us towards achieving the ambitious targets outlined in economic development plans.
• Prudent market oversight that balances the rights of investors with the stability of operating institutions is essential to maximize the developmental and social impact of these markets.
• Egypt’s IPO program is a critical component aligned with the goals of the State Ownership Policy Document. A key objective of this document is to leverage the private sector’s contribution to fostering economic growth.
• Establishing regulatory and operational frameworks for companies targeted for acquisition through the capital market is a crucial step in facilitating access to the necessary funding for startup growth

Dr. Mohamed Farid – FRA Chairman was a keynote speaker at a high-level ministerial session alongside Hassan El-Khatib, Minister of Investment and Foreign Trade, and Ahmed Kouchouk, Minister of Finance. The session, attended by representatives from foreign financial institutions and British and Egyptian companies, focused on Egypt’s efforts to enhance its economic development and investment climate. Todd Wilcox, CEO of HSBC Egypt, moderated the event. The door-knocking mission which  is organized annually by the British Egyptian Business Association (BEBA) began on Wednesday, seeks to enhance bilateral trade relations, foster greater opportunities for discussing potential investment prospects in Egypt, and promote economic collaboration between the two countries.

Dr. Farid stated that FRA consistently prioritizes the sustainability of reforms aimed at deepening the development of the non-banking financial sector and fostering confidence among all stakeholders. To ensure the desired outcomes and achieve the intended impact of legislation and regulations on the market, FRA regularly organizes and conducts ongoing discussions and workshops with all relevant parties within the non-banking financial sector. This proactive approach is designed to enhance market competitiveness and attract both local and foreign investments.

He emphasized that FRA prioritizes market integrity and stability, the protection of investor rights, and the digitization and simplification of procedures as key components of its work plan. Dr. Farid added that FRA recognizes that developing markets and introducing innovative products that can offer investment opportunities within the non-banking financial sector is a continuous goal. Therefore, FRA remains committed to fostering an environment conducive to investment and growth in this sector.

In the panel discussion, he highlighted how FRA’s objectives align with Egypt’s efforts to implement economic development plans, achieve economic growth targets and increase employment rates. He emphasized the collaborative nature of government entities and ministries, working together towards a common goal of serving economic development.

Dr. Farid emphasized that the Authority’s collaborations with local and international institutions and entities are crucial for adopting global best practices and standards. Through extensive and ongoing communication with all relevant stakeholders, both domestically and internationally, the Authority can effectively implement policies that deliver the desired outcomes.

He emphasized that increasing savings levels will play a crucial role in providing the necessary funding for investments and financing various growth initiatives, ultimately contributing to the achievement of all government targets for tangible and substantial economic development.

Dr. Farid also emphasized that prudent market oversight requires balancing the rights of investors with the stability of all operating institutions to enhance the developmental and social impact of the markets . Moreover, he highlighted the necessity of Egypt’s IPO program in achieving the objectives of the state ownership policy document, particularly in increasing the private sector’s contribution to economic growth rates.

He added that FRA has issued regulatory and executive frameworks for the listing and trading of SPAC shares, a crucial step in supporting startups’ access to the necessary funding for growth.  He pointed out that FRA Board decree No. (148) of 2024 stipulated that temporary listing of  SPACs  shares on the Egyptian Stock Exchange requires a minimum issued and paid-up capital of 10 million Egyptian pounds. Additionally, these companies are obligated to increase their capital in cash to 100 million pounds within three months from the date of listing their shares on the Stock Exchange. Additionally, the information memorandum accompanying the listing request must include several key items: general company data, the expertise of its founders and board of directors, target sectors and investment controls, and a detailed investment plan for acquiring the target company or companies. This plan should outline the acquisition method, specifying whether it will be in cash, credit, or shares. Also, the said  decree stipulates that the information memorandum must also include investment risks, redemption controls, the framework governing the management of the company’s capital, including the funds raised from the subscription, along with disclosures of associated persons and related parties, and measures to mitigate conflicts of interest. Additionally, eligible investors should be informed that subscribing to the shares implies their agreement to trade their shares at a price not exceeding the nominal value until the disclosure report is published following the completion of the acquisition or the release of the company’s financial statements for the first fiscal year after incorporation.

Dr. Farid also confirmed that FRA will set a minimum of 50 shareholders and ensure that freely traded shares constitute at least 5% of the company’s total shares. Furthermore, trading of the company’s shares will be restricted to financial institutions and qualified investors under the supervision of the executing brokerage firm until the necessary requirements for public trading are met.  In addition, the decree stipulates that the draft acquisition resolution, encompassing all details related to the activities of the target company or companies must be presented to the company’s Extraordinary General Assembly within six months from the date of listing the company’s shares on the Stock Exchange. Founders and their related parties are prohibited from voting on this resolution. Additionally, shareholders who object to the acquisition resolution at the General Assembly meeting have the option to exit the company within 30 days of voting.

He added that the company must complete the acquisition process within two years from the date of listing on the Stock Exchange. The acquisition of the target company or companies should result in acquiring (100%) of the capital or voting rights, or a controlling interest, followed by either integration into the company or retaining the acquired companies as subsidiaries, as determined by the company’s Extraordinary General Assembly.

FRA subsequently received the initial application to establish the first SPAC, a venture capital company intended to acquire non-banking financial services and fintech companies operating in the fields of finance, financial services, and payment platforms.

SPACs are companies established and licensed by FRA as venture capital companies with the exclusive purpose of acquiring other companies across various economic sectors. These companies raise the necessary funding for acquisitions through a private placement of their capital increase on the stock market, subject to the condition that subscription to their capital increase is restricted to qualified investors and financial institutions and trading is limited to qualified entities only. SPACs are obligated to complete acquisitions within a maximum of two years from the date of their temporary listing on the Stock Exchange, in accordance with applicable regulations and requirements.