الهيئة العامة للرقابة المالية

• Key issues discussed at the meeting included financial inclusion, sustainability disclosures and market development.

Dr. Mohamed Farid – FRA Chairman:

• “We will collaborate to strengthen the capacity of financial markets in emerging economies, thereby enhancing financial inclusion and promoting sustainable practices.”

Dr. Mohamed Farid, FRA Chairman chaired the Growth and Emerging Markets Committee (GEMC) meeting, which is the largest Committee within IOSCO. He leads the meeting in his capacity as both GEMC Chairman and IOSCO Vice-Chairman. This meeting was held during the annual meeting and public conference hosted by Turkey.

The meeting, attended by key figures including John Paul Servais, IOSCO Chairman , Emmanuel Faber, ISSB Chairman, Tajinder Singh, IOSCO Deputy Secretary General, in addition to  Raluca Tircoci-Craciun, Director Standards Implementation, IOSCO and Datin Azalina Adham, Managing Director of the Securities Commission Malaysia (SC) and Ana Fiorella Carvajal  , Lead Financial Sector Expert at the World Bank. The meeting focused on crucial issues like financial inclusion, sustainability disclosures and market development.

Dr. Farid highlighted the successful collaboration between GEMC and the ISSB, emphasizing the importance of IOSCO’s support for emerging markets in preparing sustainability reports. He stressed that sustainability offers a significant opportunity for these markets to attract investments and plays a vital role in global efforts to combat climate change.

Dr. Farid emphasized the need for simplified sustainability approaches, particularly for small and medium-sized enterprises (SMEs). He highlighted that sustainability is not solely a concern for large corporations or the financial sector. He stressed the importance of both listed and unlisted companies integrating sustainability standards and practices into their business models.

To promote these standards, FRA launched the first Voluntary African Carbon Market for trading carbon credits.  Twenty-one projects aimed at reducing carbon emissions have been registered following FRA’s board decree no. 31 on listing and delisting rules for carbon credits.  145,000 voluntary carbon credits have been registered across various sectors, including agriculture, demonstrating the Authority’s commitment to achieve sustainable development goals.

Dr. Farid emphasized that sustainability practices should extend beyond listed companies to encompass all businesses. He argued that sustainability enhances competitiveness and transparency, enabling companies to attract foreign investment while fulfilling their social and environmental responsibilities.

It’s important to note that the International Sustainability Standards Board (ISSB) has developed a set of global sustainability disclosure standards. These standards provide a comprehensive and high-quality framework that benefits both investors and financial markets. By establishing a global baseline, the ISSB helps companies meet investor information needs and effectively communicate their sustainability performance to global capital markets.

Dr. Mohamed Farid emphasized that capacity building is a paramount concern for the Growth and Emerging Markets Committee (GEMC). He emphasized the successful adoption of the ‘Building Capacities’ report by the IOSCO Board in October, a significant achievement resulting from the collaborative efforts of GEMC members. Furthermore, Dr. Farid mentioned the Committee’s endorsement during its Athens meeting of the ‘NEXTGEN’ project, or ‘Enhancing Excellence through Growth, Education, and Networking.’ This project thoughtfully considers the diverse membership of GEMC, encompassing emerging markets across different development stages, from early-stage to near-frontier economies.

During the meeting, FRA Chairman highlighted the critical role of financial inclusion in driving market development. He emphasized that financial inclusion empowers individuals and businesses by enabling access to and utilization of non-bank financial services, expanding the customer base and meeting their needs. He underscored the indispensable role of technology and digitalization in achieving this crucial objective.

Dr. Farid further stated that the integration of fintech and digitalization of non-bank financial transactions significantly strengthens the non-bank financial sector. He highlighted that fintech plays a crucial role in expanding access to non-bank financial services for all members of society. He concluded that the utilization of fintech fosters competition within financial markets.

Dr. Farid emphasized the issuance of Decree No. 57 of 2024, which regulates the use of Robo-Advisors. These electronic systems employ AI algorithms to provide personalized financial advice for portfolio management.

He highlighted the importance of SME financing in emerging markets. The GEMC has issued a report on the regulatory challenges faced by SMEs in accessing capital, shedding light on potential solutions for regulators. Furthermore, the GEMC issued a report in July 2015 on financing SMEs through capital markets.

On the other hand, Dr. Mohamed Farid emphasized the critical importance of market development within the GEMC’s agenda. He highlighted the Committee’s significant efforts in this area, including the 2020 report on ‘Developing Emerging Capital Markets: Opportunities, Challenges, and Solutions, in addition to the ongoing work of the GEMC  Market Development Working Group, including a recent workshop held in Cairo last year.