الهيئة العامة للرقابة المالية

• The Authority mandates licensing for 20 designated professions. This licensing process verifies the professional qualifications and financial soundness of applicants.
• Companies eligible for margin trading will need licensed technical analysts and credit analysts to ensure responsible practices.
• The decision aims at ensuring the competence of capital market professionals, this decision lays the groundwork for effective controls and regulations that promote stable market growth.
• The license is valid for 3 years and can be renewed for additional 3-year terms, as long as all the activity requirements are still met.
• This decision stipulates that holders of designated key functions within securities companies must notify the Authority upon commencement of their employment contract and upon termination of their employment, with the reason for departure being mandatory.
• Farid – FRA Chairman: The new decision aligns with the Authority’s strategy to improve professional skills in the financial sector. This will ultimately lead to stronger, more stable markets that protect consumers
• By establishing, maintaining, and adjusting licensing requirements for key positions, we can ensure that companies’ employees possess the necessary qualifications and competence to perform their duties effectively

Under the chairmanship of Dr. Mohammed Farid, FRA’s board of directors issued Decision  No. 2 of 2024 on  regulating licensing of some key functions in securities companies in the light of the Authority’s keenness to enhance skills and competencies  of those responsible for key functions in securities companies. The said decision enhances the efficiency and competitiveness of these institutions upon providing their services to their customers effectively.

The decision stipulates that its provisions shall apply to key posts in all securities companies and not only brokerage companies, as was the case in decision No. (24) of 2007. The decision also specifies the posts to be included in the structure of the companies according to the company’s activity, as well as the conditions and experience period for those wishing to obtain a license from the Authority to exercise main functions in a securities company.

According to the said decision, companies with more than one license were allowed to engage in securities activities, but they were required to fill only one position for each licensed activity after obtaining Authority’s approval, to facilitate companies.

The decision also set requirements to obtain license for key posts and the procedures and documents needed for obtaining the license. License duration shall  be three years and may be renewed for similar periods after meeting the said  licensing requirements. The decision also gives the  Authority the right  to request that the person wishing to renew the license  shall pass personal tests or interview specified by the Authority or obtain training courses in his/her specialization as the Authority deems appropriate.  In this respect, FRA can ensure that these persons have the necessary expertise and competence and are adequately qualified for posts.

The decision obliges the licensed person to perform one of the key functions to notify the Authority upon commencement of his contract to work in a Securities Company. Also, he shall notify the Authority when he leaves the company and the reasons , as well as when moving to another Company. The decision also obliges Securities Companies to maintain a registry to list their key incumbents. Securities Companies shall inform the Authority of incumbents’ names and shall provide the Authority with any amendments to such data, so that the Authority ensures companies’ commitment to the said decision.

The decision also obliges the Company  shall notify the Authority if one of its main functions is vacant and it shall appoint a substitute within a maximum period of three months from the date of the vacancy. Also, the Company shall select one of its employees whose work or experience corresponds to the vacant post.

The decision mentions cases of license cancellation as follows: if the licensee does not apply for renewal within three months from the date of license expiration, if he does not meet licensing conditions, or if it proved that his documents are fake. The decision also mentions the administrative measures that can be taken by the Authority if the person authorized to exercise one of these functions violates the provisions of the decision or the legislations governing Capital Market. These measures may include a warning, a suspension of the license for a period not exceeding one year or the revocation of the license and the licensee shall obtain the license only after a minimum period of one year.

Securities Companies have one year to adjust their staffing structure to meet the new licensing requirements. This grace period can be extended if they present a valid justification to the Authority. Existing licenses granted under Decision No. 24 of 2007 will remain valid until their expiry date, but companies must meet the renewal requirements outlined in the new licensing decision.

The decision also authorized those wishing to obtain a license to perform key functions in securities companies to submit license application to the Authority themselves on the form prepared for this purpose by the Authority without the need to submit the application through the company.

The activities of Securities Companies are diversified to include securities brokerage , formation and management of portfolios, investment funds management , custodians, classification of securities, investment funds, capital venture , Co-Founding, Financial Consulting, Securitization and Market Maker, Management Services, Stock Assessment and Analysis and Dissemination of Securities Information.

The decision also identifies the main functions as follows:  Managing Director, Internal Audit , Anti-Money Laundering Officer, Internal Audit Director, Chief Financial Officer, Risk Manager, Executor, Account Manager (Shares – bonds), Back Office Operations Manager, Finance Analyst, Technical Analyst, Research Unit Manager, Lead Credit Rating Analyst, Credit Analyst, Portfolio Manager/Investment Manager, Promotion Manager, Branch Manager, Margin Operations Manager, Human Resources Officer, Information Systems and Security Officer.

Dr. Mohammed Farid, FRA’s Chairman asserts that the new decision is taken in line with Authority’s strategy on upgrading the efficiency of professionals as a basis for developing and stabilizing markets and protecting customers. He stresses that setting licensing controls for key functions ensures the efficiency of those operating in Securities Companies.