الهيئة العامة للرقابة المالية

• Minimum issued and paid-up capital of EGP 15 million with full equity at the time of application
• Imposing a requirement on companies to provide technological infrastructure and means of protecting and securing data as specified by the Authority
• Mandating companies to establish electronic platforms for carbon credit trading and settlement
• Obligating companies to appoint a dedicated certificate trader who must successfully finish a training course specified by the Authority

Dr. Mohamed Farid – FRA Chairman issued resolution No. 1732 of 2024 outlining conditions for brokerage firms to trade carbon credits.

This step marks a continuation of FRA’s efforts to expedite the launch of Africa’s Voluntary Carbon Market. Having finalized all necessary regulatory frameworks, FRA is now poised to register voluntary reduction projects and facilitate carbon credit trading. This initiative positions Egypt as a regional leader, incentivizing domestic companies to significantly reduce carbon emissions while generating financial returns. By adhering to international standards, Egyptian businesses can seamlessly integrate into global carbon markets and capitalize on trading opportunities.

This aligns with the Authority’s strategy to complete all necessary procedures for launching the voluntary carbon market. Recently, in collaboration with the Egyptian Exchange (EGX), the Authority finalized trading and settlement rules for carbon credits.

FRA Board Resolution No. 1732 of 2024 mandates that brokerage firms seeking the Authority’s authorization to trade carbon credits must have a minimum issued and paid-up capital of EGP 15 million and equity equal to or exceeding this amount at the time of application.

Additionally, companies must establish the technological infrastructure and security measures outlined by the Authority for data protection, as well as electronic platforms for carbon credit trading and settlement.

Companies shall designate a trader to manage trading operations of this kind of certificates. The company shall certify that he will complete and pass FRA’s training program by the specified deadline.

Moreover, Companies shall maintain detailed records of all carbon credit trading activities. Additionally, they must have a clean regulatory record, with no disciplinary actions imposed by the Authority within the previous six months, excluding warnings.

Brokerage firms meeting all eligibility criteria can submit applications to the Authority for carbon certificate trading approval, along with supporting documentation. The Authority must approve or deny applications within one week. Failure to respond within this timeframe constitutes a rejection.

In line with FRA’s ongoing commitment to implement its strategic plans, the launch of the carbon market was initiated by Prime Minister’s Decree No. 4664 of 2022. This decree amended Capital Market Law’s Executive Regulations to classify carbon emission reduction certificates as financial instruments.

Following this, FRA created the initial committee to supervise carbon emission reduction units. Led by FRA Chairman, the committee consists of FRA staff, representatives from the Ministry of Environment and the Stock Exchange, as well as carbon market experts.

FRA established guidelines for the accreditation of Validation and Verification Bodies (VVBs). Following this, the committee began accepting applications and conducted assessments to evaluate applicants’ qualifications. As a result, three entities were authorized to perform verification and validation services: two local and one international entities.

Also, FRA developed listing and delisting rules for carbon credits. Additionally, it established criteria for certifying local carbon registries, which are centralized digital platforms that record, track, and manage carbon certificates generated from carbon reduction projects based on approved methodologies. These efforts complemented the Egyptian Exchange’s work on creating trading and settlement rules for carbon credits.