الهيئة العامة للرقابة المالية

• the meeting, attended by Dr. Rania Al-Mashat, Minister of Planning and Economic Development and International Cooperation, served as a continuation of the discussions and meetings held by FRA Chairman during his participation in the Annual Meetings of the World Bank Group and IMF in Washington.

Dr. Mohamed Farid – FRA Chairman:

• Regulation and supervision of non-banking financial markets are essential for enabling companies to access financing and achieve growth.
• Completing the regulatory framework for digital transformation has helped many startups secure external financing.
• We are committed to maintain a compelling environment for new ventures by streamlining startup licensing and facilitating all procedures for entrepreneurs.
• We customized the Egyptian evaluation standards for startups by developing and adding tailored methodologies that are commensurate with their specific business models.
• The launch of the first Egyptian standards for valuing intangible assets supports the digital economy, enhances investor confidence and ensures fairer valuations.
• We constantly work to update Egyptian Accounting Standards to align with global changes and enhance transparency.
• We prioritize crowdfunding as a new mechanism to empower SMEs and foster innovation.
• We are developing the regulatory framework for Special Purpose Acquisition Companies (SPACs) to attract promising capital.

Dr. Mohamed Farid, FRA Chairman participated in a high-level meeting with the Atlantic Council – a prominent American think tank – in Washington D.C. The meeting took place during the annual meeting of the World Bank Group and IMF, focusing on Egypt’s efforts in digital transformation, supporting entrepreneurship and startups.

The meeting, which included Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, aligned with FRA’s strategy to intensify dialogue with international financial institutions. The core objectives were to present the ongoing legislative and regulatory reforms in Egypt’s non-banking financial markets. These reforms aim to both stimulate innovation and improve the investment climate – supporting the National Strategy for Economic Reform – while ensuring benefits reach diverse investors and achieving financial inclusion.

During the meeting, Dr. Farid presented a comprehensive overview of the new regulatory approach adopted by the Authority to support the establishment and licensing of startups. He explained that the Authority continues to work on developing an integrated environment that facilitates licensing procedures and reduces timeframes, enabling entrepreneurs to launch their projects in an environment characterized by transparency and rapid response. He indicated that the Egyptian experience in this field has shown tangible success in attracting local and international investments and that the Authority is constantly seeking to provide a flexible regulatory framework that is compatible with the nature of innovation and the rapid growth of startups.

FRA Chairman addressed the development of new financial valuation standards for startups, explaining that the previous lack of accurate frameworks challenged investors seeking fair values. To solve this, the Authority introduced Egyptian standards specifically tailored for fintech and startups. These standards utilize methodologies that account for digital business models and intangible assets, thereby boosting investor confidence and leading to more objective valuations. He noted that the valuation process rigorously analyzes company strengths, weaknesses, future opportunities, challenges, governance compliance and ability to meet obligation

Dr. Farid pointed out that FRA has finalized the first Egyptian standards for valuing intangible assets in the Arab region. These standards cover crucial assets like intellectual property, software, trademarks and digital data. This move represents a qualitative leap for companies in the digital economy, as it allows for the calculation of the true economic value of these assets within financial statements. This clarity is expected to significantly improve financing and investment decisions.

Furthermore, FRA Chairman reviewed efforts to update Egyptian Accounting Standards to align with global market shifts. This ongoing development aims to increase compatibility with International Financial Reporting Standards (IFRS), while still respecting the unique aspects of the Egyptian economic environment. Dr. Farid affirmed that this development enhances financial transparency and disclosure, providing both local and foreign investors with a clearer view of the financial performance of all companies, whether listed or non-listed.

Dr. Farid outlined FRA’s efforts to regulate Crowdfunding, identifying it as a key driver for supporting innovation and entrepreneurship, especially within the Small and Medium Enterprises (SMEs) sector. The Authority has successfully issued comprehensive regulations that strike a crucial balance: they ensure investor protection while simultaneously granting innovative companies easier access to funding, thereby achieving harmony between market growth and effective supervision.

FRA Chairman also addressed the regulatory developments concerning digital real estate platforms and Real Estate Crowdfunding. FRA is actively working to establish regulatory rules that will enable collective real estate investment through electronic platforms. This move is designed to allow both individual and institutional investors to participate in real estate projects with greater transparency and efficiency. This forward-looking approach is expected to enhance market flexibility and open up new investment avenues in a sector that increasingly demands innovative financing solutions.

Dr. Farid also shed light on the development of listing rules for Special Purpose Acquisition Companies (SPACs) in the Egyptian market. He stressed that SPACs serve as a modern tool for attracting capital to promising enterprises, facilitating their structured entry into capital markets.  He added that FRA is actively updating these rules to ensure greater flexibility and alignment with international best practices, aiming to strike a balance between investor protection and fostering company growth.

Additionally, Dr. Farid highlighted the regulatory mechanisms for electronic Know Your Customer (e-KYC), a pivotal development for digital transformation and financial inclusion. He pointed out that FRA has adopted an integrated electronic system for remote customer identification that guarantees accuracy, security and full compliance with international standards for Anti-Money laundering and counter-terrorist financing. This step has significantly eased access to the non-banking financial sector for new individuals and institutions, thus expanding the investor base, particularly in microfinance and crowdfunding activities.

Concluding his participation, Dr. Mohamed Farid underscored FRA’s commitment to continuous engagement with international institutions, viewing these meetings as essential for deepening technical cooperation and exchanging regulatory expertise. He stressed that the discussions in Washington were a vital step toward consolidating the Egyptian market’s position as an innovative and sophisticated financial hub. Dr. Farid affirmed the Authority’s unwavering commitment to develop its regulatory and legislative framework to better support sustainable growth, embrace innovative companies and attract greater local and international investment for the benefit of the Egyptian economy.