الهيئة العامة للرقابة المالية

• FRA stresses the significant risks of dealing with unlicensed financial entities and urges the public to always verify licenses.
• Unlicensed entities and online platforms operating in the field of receiving & pooling funds for investment will face legal consequences.
• Do not participate in subscriptions for any securities (shares and bonds) unless the Authority has explicitly approved the public offering.
• Exercise extreme caution and avoid investing through companies lacking the necessary licenses to receive funds for investment or platforms offering financing without authorization.
• FRA urges citizens not to be misled by fictitious investment schemes or to deal with entities that have not obtained approvals from regulatory authorities.
• FRA has dedicated a section on its website listing entities licensed to provide non-bank financial services such as investment, financing and insurance.
• Unlicensed entities and online platforms that provide financing and receive funds for investment purposes expose themselves to legal accountability.
• The negative list of unlicensed entities offering non-bank financial services and products will be released shortly, pending the receipt and verification of citizen reports and the Authority’s review of company business models.
• FRA regulates the trading of investment fund certificates representing shares in metals, including (gold), and not direct investment in gold. The Authority has only approved three funds and their data is available on FRA’s website.
• FRA warns citizens against investing in real estate through unlicensed entities or without verifying ownership.
• FRA warns citizens against investing in virtual and encrypted currencies.
• Citizens should promptly report unlicensed non-bank financial product solicitations to FRA at whistleblowing@fra.gov.eg.

In its ongoing role of supervising and regulating non-bank financial markets and instruments, the Financial Regulatory Authority (FRA) once again warns all citizens not be misled by online solicitations from individuals and entities urging investment in financial instruments and products that violate Egyptian law. Engaging with these unauthorized offerings carries significant risks for individuals and those who promote them will face legal consequences.

The Authority has recently noted the online promotion of investment invitations and unlicensed financing platforms targeting citizens. Consequently, FRA has warned citizens about the dangers of responding to these unlicensed entities operating in receiving & pooling funds for investment, as this exposes them to significant risks of fraud or scams without regulatory protection.

The Authority has recently become aware of a significant number of websites and social media platforms that are promoting and soliciting public investment in projects in exchange for returns, all without the necessary operational licenses or approvals. These actions are in direct breach of Capital Market Law No. 95 of 1992, Article 4, which unequivocally requires a Financial Regulatory Authority-approved prospectus for any public offering. Additionally, they violate Law No. 146 of 1988 concerning companies operating in the field of receiving & pooling funds for investment, particularly Article 1, which explicitly forbids any entity other than publicly listed joint-stock companies from receiving public funds for investment purposes, directly or indirectly soliciting public subscriptions, or collecting such funds for investment or participation.

In its ongoing commitment to prioritize the protection of stakeholders within the non-bank financial services sector, the Authority has established an updated section on its website. This section provides a comprehensive directory of all entities duly licensed to conduct non-bank financial activities and offer investment, financing and insurance services and products, thereby facilitating public verification of their credentials. Furthermore, the Authority is currently developing a “negative list” for its website which will encompass all entities identified through substantiated reports as providing non-bank financial services and products without the requisite licenses or approvals. To prevent citizens from exposing themselves to high risks, this warning is issued against dealing with these entities. Furthermore, the Authority is taking legal measures against these platforms or companies.

The Authority encourages citizens to report any solicitations for financial, investment or financing products from unlicensed entities by sending details and supporting evidence to (whistleblowing@fra.gov.eg).

Accordingly, the Authority issues a strong warning to all participants in the Egyptian market to exercise utmost caution and not be tempted by these solicitations promising quick profits. It reiterates that those who advertise and promote such unauthorized investments will be held legally responsible by the relevant authorities.

The Authority also cautions against the illegal promotion of other instruments, specifically virtual encrypted currencies. It urgently warns all Egyptian market participants to be extremely vigilant and avoid recent solicitations to engage in these currencies due to their substantial risks, potential involvement in financial crimes and cyber piracy, lack of underlying value for stability and user protection and the exposure of users to fraud and legal repercussions for violating Egyptian law. Egyptian law prescribes imprisonment and/or a fine of one to ten million Egyptian pounds for anyone trading, promoting or offering activities related to these currencies without prior authorization from the relevant bodies.

This public awareness campaign by the Authority reflects its ongoing commitment to enhance financial literacy, enabling citizens to make informed investment choices. This aligns with its core function of safeguarding the rights of all participants in non-bank financial markets, fostering market stability and bolstering trust in these services.

Concerning recent observations of entities and individuals soliciting gold investments, FRA strongly advises citizens to disregard any such solicitations from unlicensed entities. Engaging with them poses significant risks to investors and the promoters face legal repercussions.

In its regulatory role over non-bank financial markets, FRA emphasizes that it has specifically regulated gold investment through licensed investment funds offering gold certificates. This follows a comprehensive regulatory framework for precious metals investment via funds, distinct from direct dealings between metal traders and investors/consumers, which are governed by Commercial Law and Law of Precious Metals and Gemstones. The Authority has already approved three gold investment funds for public offering and urges citizens to avoid depositing funds for metal investments with any entities other than these authorized funds to protect their capital.

Companies intending to promote public share offerings or receive funds should first contact the Financial Regulatory Authority (FRA) for information on the applicable legal and regulatory requirements before making any public announcements.

A list of entities licensed for non-bank financial activities (investment, non-banking finance, insurance) is available at: https://fra.gov.eg/registration/

For inquiries regarding the legal and regulatory requirements for promoting public share offerings, please email: Inquiries@fra.gov.eg