الهيئة العامة للرقابة المالية

• The conference focused on emerging trends in the financial sector, with a particular emphasis on digital services and fintech investments. These areas are crucial for driving financial inclusion and promoting innovation

Dr. Mohamed Farid – FRA Chairman:

• FRA is committed to fostering innovation-based financial inclusion through digitization and supporting startups.
• FRA always work to provide an enabling regulatory and legislative environment that motivates startups to grow and develop businesses
• Entrepreneurship has been a driving force behind the economic resurgence of many developed nations. Recognizing the significant potential of Egypt’s entrepreneurial ecosystem, FRA is committed to supporting and empowering local entrepreneurs.
• As a demonstration of its commitment to innovation, FRA recently approved the first application for a Special Purpose Acquisition Company (SPAC) shortly after establishing the necessary procedures.
• FRA’s goal is to offer a diverse range of investment mechanisms, while always prioritizing market integrity and stability.

FRA Chairman participated in Fintech Surge 2024, the leading fintech conference in the Middle East and North Africa region. The event took place in the United Arab Emirates from October 13^th to 16^th .

FRA Chairman participated in an open dialogue session at Fintech Surge 2024. The discussion, moderated by Karima El Hakim – Director for Plug & Play in Egypt. The dialogue focused on key trends shaping the future of the financial sector, including digital services, fintech investments, and collaboration between financial institutions and fintech companies.

Dr. Farid emphasized FRA’s commitment to providing a regulatory environment that fosters innovation and encourages startups to invest in Egypt’s non-bank financial sector. FRA aims to facilitate financial, insurance, and investment inclusion through a conducive regulatory framework.

He pointed out that FRA has finalized a comprehensive legislative and regulatory framework to accelerate digital transformation and promote financial inclusion. This framework includes a series of resolutions and regulations aimed at digitizing non-bank financial transactions, which will expand access to financial services for a larger number of beneficiaries.

Dr. Farid highlighted FRA’s commitment to providing cutting-edge technology solutions for various financial services, aligning with Egypt’s Vision 2030 and the broader national plan to automate and digitize all financial services.

FRA has been instrumental in advancing digital transformation within the non-bank financial sector. In 2022, the Authority enacted Law No. 5 to regulate the use of financial technology in non-banking financial activities. Subsequently, Decree No. 58 was issued to outline the requirements for establishing, licensing, and approving fintech companies operating in the non-banking financial sector.

He added that FRA has issued Decree No. 139 of 2023 to establish standards for equipments, technological infrastructure, information systems, and security measures for fintech companies operating in the non-banking financial sector. that is besides Decree No. 140 of 2023 on establishing standards for digital identity, digital contracts, digital records and the use of fintech in non-bank financial activities. It includes specific requirements for customer digital identification, making it a pioneering regulatory decree in the financial sector.

In addition to Decree No. 141 of 2023 aims to establish the Outsourcing Registry, for companies engaged in FinTech activities offering outsourcing services.

Dr. Farid pointed out that facilitating access to non-bank financial products and services depends significantly on the market’s progress in using digital contracts and records on fintech platforms.

He emphasized that digital transformation is at the forefront of FRA’s priorities. This transformation facilitates access to and acquisition of appropriate financing for all members of society, thus creating opportunities for business expansion or initiation, ultimately leading to improved living standards.

Also, Dr. Farid emphasized that ensuring market stability and safeguarding the rights of market participants are the Authority’s top priorities. The Authority is committed to offering a diverse range of investment opportunities. However, the primary focus remains on maintaining market integrity, stability, and streamlined.

On the other hand and in accordance with Decree No. 148 of 2024, FRA imposed several conditions on special purpose acquisition companies (SPACs) seeking a temporary listing on the Egyptian Exchange. These conditions include a minimum issued and paid-up capital of 10 million Egyptian Pounds, a commitment to increase the capital to 100 million Egyptian Pounds within three months of listing, and a requirement to offer the additional shares through a private placement to qualified investors or financial institutions. Moreover, the information memorandum accompanying the listing application must include details such as the company’s general information, the experience of its founders and board members, target sectors, investment criteria and an investment plan for acquiring target companies, specifying the acquisition method (whether through cash, debt, or share swap).

FRA recently approved the first application for a Special Purpose Acquisition Company (SPAC) shortly after establishing the necessary procedures.

SPACs are companies licensed by FRA solely to raise cash fund, through an initial public offering (IPO), for the purpose of acquiring or merging with an operating business (the target company), where the initial public offering (IPO) restricted to qualified investors and institutions. SPACs shall acquire the target company within a two-year timeframe from date of its initial listing and in accordance with specific regulations.

 Also, Dr. Farid highlighted the Authority’s role in providing a regulatory environment that supports innovation and encourages startups to build investment partnerships in Egypt’s non-bank financial sector. He emphasized the Authority’s adoption of an open dialogue and partnership approach with all relevant stakeholders, which will contribute to creating a dynamic, competitive, and innovation-driven non-bank financial system that is attractive to investors.