الهيئة العامة للرقابة المالية

• FRA has reviewed its efforts to boost the non-banking financial sector’s contribution to the national economy since August 2023.
•  FRA has prioritized digitization initiatives and accelerated the development of the Voluntary Carbon Market to maximize the non-banking financial sector’s developmental impact.
• FRA has registered 14 projects in the Voluntary Carbon Market database, facilitating over 12 trading transactions with 4,500 carbon credits.
• The total number of registered carbon credits has reached 18,375.
• Gold investment funds have attracted a significant number of investors, reaching 131,000 by the end of August.
• FRA has continuously refined EGX listing and trading rules to enhance market liquidity and depth, thereby increasing competitiveness and attracting investments.
• FRA has comprehensively developed Egyptian Accounting Standards, benefiting large economic entities through revaluation opportunities.

Prime Minister Dr. Mostafa Madbouly met today with FRA Chairman, Dr. Mohamed Farid – to review a number of FRA’s work files. At the beginning of the meeting, FRA Chairman reviewed a report on FRA’s efforts during the period from August 2023 to date to enhance the role of the non-banking financial sector in the national economy and maximize its positive and sustainable developmental impact on the Egyptian society.

Dr. Mohamed Farid highlighted the completion of the essential executive frameworks for digitizing non-bank financial transactions and the ongoing efforts to expedite digital transformation and achieve financial inclusion within the non-bank financial sector. FRA has taken proactive steps by issuing a package of executive decisions and regulations aimed at accelerating the pace of digital transformation, thereby enhancing financial inclusion levels and expanding the reach of non-bank financial services to a wider segment of individuals. Furthermore, a groundbreaking partnership has been established between an insurance company and a communications company to market and distribute insurance products, pursuant to the decrees issued by the Authority.

FRA Chairman explained that the first African Voluntary Carbon Market was launched to trade carbon credits in support of the Egyptian government’s efforts to reduce carbon emissions. He added that 14 projects were registered and more than 12 transactions were implemented, noting that the number of voluntary carbon credits reached 4,500 and the number of carbon credits registered in the FRA’s registry reached 18,375 certificates.

Dr. Mohamed Farid also pointed out the launch of 3 gold investment funds, namely: AZ-Gold Fund, Al Ahly Financial Investment Management Company’s investment fund, and Evolve Cumulative Daily Return Gold Fund (Dahab), a subsidiary of the National Bank of Egypt. 131,000 citizens are currently investing EGP 925 million through gold investment funds, until the end of August 2024, by providing diverse and innovative investment products that meet the needs of Egyptians and enhance savings levels.

He explained that the Authority has developed a comprehensive legislative and regulatory framework for the establishment of gold investment funds, which helps Egyptians invest their savings in gold safely and in organized manner.

Dr. Farid emphasized that the issuance of the Unified Insurance Law will bolster the capabilities and competitiveness of the insurance sector in Egypt and broaden insurance coverage. He noted that FRA is actively working on issuing all the necessary executive decrees and regulations to implement the law, collaborating with various stakeholders in the insurance industry. Furthermore, he confirmed that the issuance of a package of decrees to refine the provisions of the Egyptian Accounting Standards, aimed at supporting economic activity and aligning with the highest international standards.

FRA Chairman added that in recognition of the utmost importance of having qualified professionals who are able to formulate and implement policies that keep pace with global developments , integrate with the state’s plans and enhance the efficiency and competitiveness of non-bank financial markets and institutions, the first professional diploma specialized in actuarial science in insurance was offered under the auspices of FRA in cooperation between the  Insurance Federation of Egypt “IFE” and the American University, so that the number of actuaries in Egypt is commensurate with the size of the current market.

Dr. Mohamed Farid also highlighted the establishment of the first Egyptian Securities Federation, a groundbreaking development in the history of the Capital Market. He pointed out that FRA has successfully completed the issuance of various regulatory and procedural decrees and regulations essential for the establishment of this Federation.

FRA Chairman highlighted FRA’s efforts to bolster the financial solvency of non-banking finance companies by substantially increasing their minimum capital requirements. Financial leasing companies, factoring companies, and consumer finance companies will now be required to have a minimum capital of EGP 75 million, up from EGP 10 million. SME finance companies’ minimum capital requirement raised from EGP 30 million to EGP 75 million, while microfinance companies will be subject to a minimum capital of EGP 75 million, an increase from EGP 15 million. Additionally, the minimum threshold for real estate finance companies has been elevated to EGP 100 million.

Several decrees were enacted to streamline and simplify the listing and trading rules and requirements, thereby incentivizing companies to list, offer their shares, and expand through the Capital Market. These measures also aimed to enhance trading activity and attract a larger investor base, supporting the government’s IPO program.

Over ten decrees were implemented, encompassing measures such as permitting the issuance and registration of sukuk and bonds without a credit rating while restricting trading to qualified investors through a private placement. In addition to regulations and procedures set for securities brokerage companies to trade foreign securities not listed on the Egyptian Stock Exchanges.

That is besides the issuance of licensing regulations  for certain positions within Securities Companies, streamlined procedures for registering clients from investment funds and foreign companies of all types on the stock market, simplified procedures for reactivating dormant accounts. In addition to obliging companies to obtain advanced margin purchase reports from the Stock Exchange. Also, the Authority issued a decree to enhance the protection of accounts belonging to individuals dealing with securities companies. Additionally, the Authority issued controls and procedures for offering investment funds’ certificates in batches and approving closed-end investment fund companies to offer multiple forms of certificates, along with regulations governing the use of electronic systems for remote attendance and voting at meetings of investment fund unitholders.

In addition to shortening the interval between the disclosure report publication date and the assembly convening date to a week from 21 days and reducing the timeframe between the invitation for old shareholders to subscribe and the subscription commencement (the original share trading period with priority subscription rights) to a week from 15 days.

FRA has finalized a comprehensive update of the Egyptian Accounting Standards to bolster economic activity. By issuing a package of decrees aimed at refining these standards, FRA seeks to support economic activity and align with the highest international benchmarks, enabling economic entities engaged in diverse productive activities to accurately reflect their financial statements and business outcomes. These efforts are in response to the rapid economic developments occurring locally, regionally, and globally, as well as the pressures and challenges faced by companies in carrying out their operations and achieving their goals, as confirmed by FRA Chairman.

The Egyptian Accounting Standards Committee (EASC), established by a Prime Ministerial decree, endorsed the adoption of the revaluation model for fixed assets (Standard No. 10), intangible assets (Standard No. 23), exploration and evaluation of mineral resources (Standard No. 36), and the fair value model for real estate investment (Standard No. 34) and their respective amendments. These changes empowered companies to revalue their assets to align with their fair values, ensuring that their financial statements accurately reflect their financial position and business outcomes. The process of developing Egyptian Accounting Standards encompassed the rules and mechanisms governing asset revaluation. The amendments further included the issuance of Egyptian Accounting Standard (EAS) No. (50) on insurance contracts, aligning it with international standards.

Consequently, numerous significant Egyptian economic entities have revalued their assets at market value to ensure that their financial statements accurately portray their financial position and business outcomes. Moreover, many companies are currently exploring the possibility of adopting this standard, which has not been previously applied