الهيئة العامة للرقابة المالية

• These are the first regulations to govern investment in real estate fund certificates via secure, FRA-monitored digital platforms.
• The new regulations streamline the process for investing in shared real estate ownership certificates, making it faster and easier through licensed platforms supervised by FRA.
• Three real estate platforms have already begun the process of compliance, establishing new investment funds, securing the necessary promotion, and underwriting licenses.
• Platforms are required to meet certain conditions for customer registration, including passing a knowledge test approved by FRA.
• Platforms must provide a permanent communication channel between real estate funds and registered users to address all inquiries.
• Platforms must provide a set of disclosures to help both potential and registered investors make informed decisions.
• Each platform must provide a digital subscription form, and all involved parties are required to follow specific subscription rules.
• A comprehensive and transparent framework for redeeming investment certificates will be established, which will boost market trust and safeguard investor interests.

FRA Board of Directors, chaired by Dr. Mohamed Farid, issued Resolution No. 125 of 2025. This resolution establishes the first-ever regulatory framework for digital real estate investment platforms.

The new regulations create a mechanism that allows individuals to easily invest in fractional ownership of real estate units. This is achieved through investment certificates issued by real estate funds and traded on licensed digital platforms. This initiative is a continuation of FRA’s strategy to provide innovative, affordable investment products that meet investor needs and promote financial inclusion.

FRA’s goal is to create a comprehensive legal framework for all digital real estate investment platforms, ensuring a safe, transparent and efficient investment environment. As a result, existing real estate platforms are now required to formalize their status under the new regulations. This also provides real estate developers with a clear pathway to offer their projects to investors through FRA-licensed digital platforms.

The issuance of these regulations follows a series of productive meetings between FRA, real estate sector leaders and owners of existing electronic platforms. These discussions reflect FRA’s commitment to engage in an active dialogue with all stakeholders to create regulations that have a real, developmental impact on the sectors it oversees. The meetings focused on aligning the activities of these platforms with the non-banking financial laws and regulations implemented by FRA.

As a direct result of the new regulations, three existing entities that operate electronic platforms for selling real estate shares to the public have already submitted applications to  FRA to formalize their status.

The resolution provides a clear definition of “digital real estate investment platforms”. Such platforms are defined as a technology-based business model for non-banking financial activities. To operate, a platform must be accredited by FRA and facilitate the subscription and redemption of real estate investment fund certificate. It must also display all necessary data and information for these transactions.

To ensure investor protection, each platform is required to provide all necessary disclosures, enabling investors to track their investments effectively. Furthermore, platforms must announce asset pricing periodically, based on valuations from FRA-licensed entities and using FRA-approved valuation standards. All contracts and investment certificates will be securely stored electronically with licensed entities.

With this resolution,  FRA has established the first set of organized rules for the operation of digital platforms that invest in real estate fund certificates, provided they have obtained the necessary license. A key requirement is that a platform can only register an investor after verifying that all registration conditions are met. The most crucial of these conditions is the successful completion of a knowledge test, which is prepared by the platform and approved by FRA. This test ensures that users have first reviewed introductory and educational materials about the specific investment product and its associated risks.

In addition, platforms are required to provide secure and approved digital payment channels. They must also open the necessary accounts with the central clearing and depository company as per the specified mechanism and register any real estate investment fund on the platform only after it has been licensed by FRA.

Subscriptions and redemptions must follow a brief information memorandum that has been approved by FRA and is published on the platform. This memorandum must include the minimum acceptable threshold for a successful subscription for each issuance and a summary of the feasibility study for the projects presented by each fund.

To ensure effective communication and robust oversight, the resolution mandates that platforms provide a permanent communication channel between real estate investment funds and their registered users. Platforms must respond promptly to all inquiries and maintain a detailed record of every complaint and its investigation results. A quarterly report on these complaints and their outcomes must be submitted to FRA.

Furthermore, to guarantee technical integrity and security, FRA must approve all electronic programs, systems and the underlying infrastructure of the applications and databases used on the platform.

The resolution mandates that platforms provide a wide range of disclosures, beginning with crucial information that investors must review before registering and investing. This includes the platform’s registration terms, details about the platform manager, mechanisms for complaint and dispute resolution and a clear explanation of operational risks. Platforms must also outline the process for refunding funds if an investor withdraws before the subscription period closes or if the minimum subscription threshold is not met.

Additionally, platforms are also required to provide comprehensive, ongoing disclosures to help investors track their investments. These include a brief information memorandum approved by FRA for each fund issuance, as well as the fund’s annual and periodic financial statements. Investors must also be provided with the certified minutes of the certificate holders’ assembly, along with details on any successive increases in the issuance size, the number of outstanding certificates and the conditions for enforcing the certificate in case of default.

Furthermore, platforms must publish a semi-annual report on the net asset value (NAV) of the investment certificate. This report must be based on a valuation from an FRA-registered expert and must include a comparative analysis of the NAV over two financial periods, explaining any changes.

For each project, a summary of the economic feasibility study prepared by the investment manager must be disclosed. This summary must include the fair value of the assets from an FRA-registered real estate valuation expert, and a justification if the purchase value exceeds the fair value. Similarly, any sale of real estate assets must be disclosed, including the market value and the sale price, with an explanation if the sale price is below market value.

Finally, the regulations mandate disclosures on dividend distributions and their due dates, insurance policies for the invested properties, and any legal events that could impact the assets, such as court judgments, expropriation, or arbitration awards. Platforms must also report any unresolved violations of the investment policy within one week of their occurrence, with a weekly update on their status.

Platforms must disclose all material events related to the fund’s investments, including any new or unexpected obligations like the fund taking on debt. They must also provide any information about the real estate properties themselves and any other data required by FRA.

The resolution mandates a secure and transparent process for subscription. Each platform must provide a digital subscription form that includes a clear acknowledgment from the investor of the associated risks. A dedicated bank account must be used for each issuance and subscribers will receive an electronic notification upon a successful transaction. The system is designed to complete remote subscriptions securely and to register ownership electronically and centrally.

To protect investors, platforms are required to promptly refund funds if a subscription is withdrawn within the specified period or if the offering’s minimum threshold is not met. A transparent, real-time electronic indicator of the subscription’s coverage results must be available. After a successful subscription, the platform must immediately notify the Central Depository and Registry Company to register ownership and make a digital investment certificate available to each subscriber.

All parties involved with the platform – including the platform manager, the real estate fund, the investment manager, the asset management company and the Central Depository and Registry Company – are held accountable. They are prohibited from publishing inaccurate information and are responsible for compensating anyone harmed by such misinformation.

The resolution establishes a clear process for certificate redemption, giving holders a way to exit their investment before the fund’s term ends. This process is strictly governed by the regulations in FRA-approved information memorandum. Funds have the flexibility to finance redemptions using available liquidity or by securing new capital through subscriptions or loans.

The fund company can redeem up to 20% of the total issued certificates, but it cannot hold them for more than one calendar year. During this time, the certificates have no voting rights or claim to profits to avoid conflicts of interest. The company must either sell these certificates to third parties using FRA-approved forms or cancel them to reduce the fund’s size. To avoid any conflict of interest, the certificates a fund company holds after redemption are stripped of all rights. They carry no voting rights and receive no profits. Furthermore, these certificates are not counted toward the quorum for the certificate holders’ assembly.

Platforms are obligated to provide the necessary electronic redemption forms, which must detail the investor’s information, the number of certificates, any outstanding installments and the net asset value (NAV) of the certificates according to the last value calculated by the asset management company