الهيئة العامة للرقابة المالية

FRA Chairman: Live Trials on Central Lending System in Preparation for Short Selling Rollout – Tuesday 13 October 2026

FRA Chairman:

• Live operational tests with Misr Clearing (MCDR) and the Egyptian Exchange (EGX) continue constructive market dialogue on short selling.
• System designed to enhance transparency and enable real-time tracking for lenders and borrowers.
• The system ensures complete documentation across all operational stages and workflows, while providing clients full transparency to view all available offers.

Financial Regulatory Authority (FRA), in coordination with Misr for Central Clearing, Depository and Registry (MCDR) and the Egyptian Exchange (EGX), is conducting live technical trials on a new Central Lending System. These tests serve as a final operational phase preceding short selling rollout, specifically securities lending and borrowing for short sales, pursuant to the newly established regulatory framework issued under FRA Board Decision  No. 155 of 2026.

Technical teams across the three entities reviewed the latest infrastructure and electronic systems upgrades. These developments ensure real-time, end-to-end integration between MCDR and licensed brokerage firms, complete documentation of operational workflows, and transparent access for short sellers to evaluate lending offers submitted by lenders—matching them to their investment strategies—while enabling lenders to view competing lending offers recorded on the system.

Furthermore, several brokerage firms licensed for short selling participated in the latest technical trials to ensure operational efficiency, smooth mechanics ahead of launch, and verified IT infrastructure connectivity with the Central Lending System for real-time order tracking.

Dr. Islam Azzam, FRA Chairman stated that Central Lending System developed and managed by MCDR will host all securities balances available for lending. He highlighted that the system operates under updated rules that enforce total transparency, strict governance, and full protection of market participants’ rights, in alignment with international best practices and under direct FRA supervision.

Dr. Islam Azzam added that ongoing live trials reflect FRA’s commitment to constructive market dialogue, balancing regulatory oversight, international practices and solutions designed to overcome historical obstacles that previously delayed short selling activation in Egypt.

He emphasized that the live trials aim to bolster transparency and allow borrowers and lenders to monitor transactions in real time. The system ensures complete end-to-end documentation by explicitly displaying available securities by name, volume, and tenure, alongside detailed transaction logs, client profiles, and position closeouts to safeguard all parties.

The short-selling mechanism involves five primary market participants: lenders offering securities for loan; borrowers securing securities to short sell and return later; licensed brokerage firms acting as executing intermediaries; custodians handling client lending requests; and Misr for Central Clearing, Depository and Registry (MCDR).

The regulatory framework guarantees that lenders retain full economic ownership—including cash dividends, bonus issues, and pre-emptive rights—throughout the lending period. However, general assembly voting rights remain with the shareholder of record on the date of meeting.

Regarding limits and risk controls, total lent shares cannot exceed 40% of a listed company’s total free-float shares, while borrowing limits for an individual client and their related parties are capped at 2% of a listed company’s total free float. Additionally, a maximum cap of 5% is allocated for direct bilateral contracts executed between a broker, lender, and borrower, held under the brokerage firm’s responsibility.

To enforce compliance, MCDR is mandated to monitor lending limits continuously to prevent statutory cap breaches, perform daily mark-to-market valuations on borrowed securities and total collateral based on closing prices, and settle daily margin differentials directly through brokerage settlement accounts. Should a brokerage firm fail to return securities, MCDR will execute buy-in and return procedures on behalf of the lender.

Furthermore, MCDR must retain all short-sale proceeds, investing them on behalf of lenders from the settlement date into fixed-income instruments or FRA-approved investment vehicles. The central depository will then disburse the lending fee and accrued investment yield to the lender within two business days following central system closure.

Finally, brokerage firms and custodians must submit all requested data, records and documentation to FRA and EGX upon demand. To preserve market stability, FRA retains executive authority to take immediate protective measures against systemic harm, up to and including revoking a brokerage firm’s license to conduct short selling

FRA Directs Non-Bank Financing Entities to Submit Activity Data on Authority Platform – Monday 12 October 2026

• FRA Reopens Data Platform until October 29 to Audit All 2026 Entries.
• Non-Bank Financing Entities Obligated to Submit Monthly Data Within 15 Days of the Following Month.

Dr. Islam Azzam, FRA Chairman:

• These obligations enhance regulatory and supervisory capabilities, improve the efficiency of performance indicators and enable early risk detection.

Financial Regulatory Authority (FRA), chaired by Dr. Islam Azzam, has issued a circular requiring all non-bank financing entities to submit monthly activity data via FRA’s dedicated electronic platform within the first 15 days of each month for the preceding period. Additionally, the platform has been reopened from Monday, October 12, through October 29, allowing entities to complete pending submissions and audit all data entered since early 2026.

Under Circular No. 7 of 2026, non-bank financing entities must provide the Authority with the required monthly data on the designated platform between the 1^st  and 15^th  of each month for the preceding month’s data entry.

Non-bank financing entities are also required to conduct a thorough and meticulous review of all data prior to submission, ensuring there are no discrepancies or errors, and verifying its accuracy, completeness, and consistency with actual records available to FRA.

On an exceptional basis, the Authority decided to reopen the platform for all non-bank financing institutions from Monday, October 12, 2026 until Thursday, October 29, 2026. This measure aims to allow entities to complete all necessary submissions, review and audit data recorded since January 1, 2026, verify its completeness and accuracy, and make any required corrections or updates.

Dr. Islam Azzam, FRA Chairman, stated that these compliance requirements strengthen regulatory and supervisory capabilities across non-banking financial markets. By ensuring the availability, quality and completeness of all activity-related data, FRA can conduct precise analysis of performance indicators across each sector, detect potential risks early and efficiently address emerging challenges.

FRA Chairman added that full compliance by non-bank financing entities in providing and reconciling monthly data supports FRA’s broader strategy to achieve full integration between corporate databases and the Authority’s central system. This continuous data flow enables FRA to derive highly accurate market indicators and share them with market participants, empowering companies to rapidly innovate and refine products to meet growing consumer needs.

It is worth noting that Dr. Islam Azzam had previously issued Decree No. 2684 of 2026, obligating consumer finance companies to establish the IT infrastructure necessary for integrating their databases with FRA’s central system. Effective since September 24, the decree requires consumer finance firms to provide real-time access to key data points, including: newly approved client profiles, real-time consumer purchasing transactions for goods or services, product/service categorizations, borrower credit performance and repayment behavior, and key metrics regarding the financial solvency of the company

Ministry of Youth and FRA Sign MoU to Drive Entrepreneurship and Fintech Innovation  – Sunday 11 October 2026

• Cooperation aims to empower promising young innovators, prepare start-ups, and connect them with funding and investment opportunities through FRA-Sandbox.

Gohar Nabil:

• Cooperation with FRA opens new horizons for young entrepreneurs to turn innovative ideas into viable, scalable economic ventures.
• Youth centers serve as a national platform for discovering young talent and driving fin-tech innovation across all Egyptian governorates.

Dr. Islam Azzam:

• Within just one year, our Regulatory Sandbox transitioned from accepting innovative ideas to testing practical execution in a live regulatory environment.
• The steadily growing youth demographic in the non-banking financial sector, alongside AI opportunities, forms a crucial foundation for promoting fintech.

Minister of Youth and Sports Gohar Nabil and FRA Chairman Dr. Islam Azzam witnessed the signing of a Memorandum of Understanding (MoU) to empower Egyptian youth in entrepreneurship, financial technology (Fintech) and non-banking financial services (NBFS). The strategic partnership aims to transform promising concepts into commercially viable, scalable ventures through the Authority’s Fintech Regulatory Sandbox (FRA-Sandbox).

The MoU was signed at FRA headquarters by Mr. Mohamed Saeed Mazen, Permanent Secretary of the Ministry of Youth and Sports, and Eng. Ahmed Khalifa, Executive Director of FRA Regulatory Sandbox, in the presence of senior officials from both institutions.

The Memorandum of Understanding (MoU) aims to foster integration between both sides in promoting youth entrepreneurship and innovation, as well as executing training and awareness programs, workshops, and introductory sessions across all governorates of the Republic. The initiatives will focus on financial technology (fintech), non-banking financial services, financial literacy and awareness, and business model development, helping young people acquire the necessary skills to establish and grow their projects in line with market demands.

The collaboration also entails nurturing and supporting the execution of innovative youth ideas and projects through the Authority’s Regulatory Sandbox, organizing events, competitions, and innovation challenges, and providing guidance and mentorship to promising innovators. Furthermore, it seeks to connect them with business incubators, accelerators, and capacity-building programs, while facilitating qualified projects’ access to investors, venture capital funds, and relevant financing networks, in accordance with applicable legal and regulatory rules and guidelines.

Specific areas of cooperation cover non-banking financial activities—including insurance, non-bank financing, financial leasing, factoring, and capital markets. It also highlights the central role of FRA Regulatory Sandbox in providing a live, supervised testing environment that allows eligible tech solutions to refine and evaluate their business models and financial products under direct regulatory oversight.

Minister Gohar Nabil stated that economically empowering young people and unlocking new horizons for their ventures represents a core pillar of the Egyptian state’s strategy for human development and sustainable growth, underscoring the importance of institutional collaboration between the Ministry and FRA to build a thriving ecosystem for innovation.

He noted that youth represent Egypt’s true wealth and that investing in their capabilities is a direct investment in the nation’s future.  He reiterated that the Ministry is committed to expand its role in supporting entrepreneurship by bridging promising founders with relevant regulatory authorities and appropriate funding opportunities.

Furthermore, he pointed out that FRA’s Regulatory Sandbox represents a vital step toward supporting promising projects by providing a regulatory environment that facilitates testing and refining innovative concepts. This enhances their chances of success and competitiveness, particularly in the fields of financial technology (Fintech), digital transformation and entrepreneurship.

Minister Gohar Nabil underscored the importance of sustained integration among state institutions to scale up initiatives aimed at empowering youth across all governorates. He emphasized that the Ministry actively works to provide opportunities that help young people build their skills and unlock their creative potential, ensuring their active participation in socio-economic development.

The Minister of Youth and Sports concluded his remarks by reaffirming that empowering youth and converting their concepts into successful enterprises represents a direct investment in Egypt’s future. He stressed the pivotal role of institutional partnerships in providing young innovators with tangible opportunities to produce, innovate and build a more diversified and sustainable national economy.

For his part, Dr. Islam Azzam, FRA Chairman stated that the Memorandum of Understanding represents a major step toward expanding cooperation with national institutions to empower youth and foster innovation and entrepreneurship. He emphasized that building a supportive ecosystem for new ideas requires synergy, knowledge exchange and connecting innovators with the key stakeholders, expertise, and opportunities needed to translate their concepts into viable, sustainable enterprises.

FRA Chairman explained that FRA-Sandbox has become one of the primary regulatory tools for fostering innovation in NBFS by offering guidance, raising legal awareness and bridging the gap between startups, financial institutions, investors and research centers.

Dr. Islam Azzam revealed key milestones achieved by the Sandbox during its inaugural year, noting that over 50 innovative ventures applied to leverage Sandbox services, with 9 projects receiving preliminary approval to join, and 2 ventures advancing to live operational testing within a real-world regulatory environment designed to balance market stability, consumer protection and data privacy. He pointed out that the Egyptian market currently includes approximately 75 entities providing tech-enabled non-banking financial services, demonstrating the sector’s swift alignment with global market dynamics.

FRA Chairman also stressed the importance of decentralizing support beyond Greater Cairo, pointing to the surging participation of youth aged 18 to 40 in non-banking finance. Notably, youth accounted for 80% of newly coded investors on the Egyptian Exchange (EGX) last year and over 70% of investors in precious metals investment funds.

He stressed the importance of generating new ideas and ventures that address socio-economic needs and support product development. He explained that the Authority aims to develop the Sandbox into a leading regional fintech hub, thereby enhancing the competitiveness of Egypt’s non-banking financial sector. This initiative will unlock further investment, foster innovative tech solutions and bridge the gap between innovators, market participants and financing entities.

Additionally, Dr.  Islam Azzam emphasized the strategic role of Artificial Intelligence in developing modern financial products, pointing out that global AI investment in Fintech reached approximately $16 billion in 2025 and is projected to grow to $80 billion over the next decade. He stressed the necessity of responsible adoption, highlighting strict adherence to data governance, risk management, and regulatory compliance to ensure safe and effective AI deployment.

Moving forward, both sides will jointly organize exhibitions, networking forums, and innovation challenges. They will leverage their combined partner networks and expert pools to integrate young founders into the broader investment ecosystem, exchange non-confidential research and form joint working groups to execute, monitor and evaluate all planned initiatives.

Overall, the MoU serves as an operational framework for bilateral cooperation within their respective mandates to expand entrepreneurs’ contributions to the non-banking financial sector and the national economy by adopting innovative concepts, nurturing emerging ventures and maximizing their value and economic returns.