الهيئة العامة للرقابة المالية

• New regulations enforce rigorous data protection standards for the digital handling of client orders.

Dr. Mohamed Farid- FRA Chairman:

• The initiative aims to democratize access to capital markets by enabling mobile-first investment solutions.
• Platform accreditation standards and required technical infrastructure.
• Integration of comprehensive service encryption and a digital portal for logging technical complaints.
• A rigorous prohibition on the use of Artificial Intelligence to generate investment advice or influence investor decision-making.
• The platform’s role is strictly promotional; it may not facilitate transactions or enter into binding agreements on behalf of the brokerage firm.
• All digital platform management contracts require prior approval from FRA.

Financial Regulatory Authority (FRA), chaired by Dr. Mohamed Farid, has issued a new resolution permitting brokerage firms to market their services through digital platforms. This first-of-its-kind move comes in response to the rapid growth of financial technology within the non-banking financial services sector.

Dr. Mohamed Farid, FRA Chairman, commented: “Our objective is to streamline secure access to capital market services for all citizens, empowering them to manage investments directly via their mobile.”

 FRA Chairman emphasized that while the resolution embeds fintech into the heart of financial services, it enforces rigorous safeguards. These controls protect investor data privacy and prevent biased influence, ensuring a secure and inclusive digital financial ecosystem.

Under resolution No. 332 of 2026, a ‘Digital Platform’ is defined as FRA-certified business model that facilitates the encrypted transmission of client securities orders directly to brokerage firms for execution.

The resolution aims to provide brokerage firms the opportunity to benefit from the wide reach of various digital platforms – including, but not limited to, e-payment apps – significantly enhancing the scale and efficiency of their marketing efforts.

The platform must maintain full infrastructure compliance by adhering strictly to the technical standards established in resolution No. 139 of 2023. Regarding security, the system is required to implement end-to-end encryption across all platform-based services. Additionally, companies must maintain a comprehensive digital log designed to systematically track, manage, and resolve all technical complaints.

Pursuant to the new resolution, digital platforms are restricted to the promotion of brokerage services following an agreement with the respective firms.

Additionally, digital platforms are prohibited from performing any actions on behalf of the brokerage firm. This includes providing investment recommendations, arranging, ranking, or prioritizing securities, or utilizing predictive modeling and Artificial Intelligence tools intended to influence client behavior or show bias toward specific brokerage services.

The resolution mandates that brokerage firms obtain prior approval from the Authority before contracting with a Digital Platform Manager to receive and transmit client orders to the brokerage firm via encrypted channels. The Platform Manager must be registered with the Authority.

The resolution defines a Digital Platform Manager as an Egyptian joint-stock corporation registered in the Outsourcing Register, responsible for the creation and management of the digital platform.

Furthermore, brokerage firms are obligated to open client accounts and execute orders independently. They may not delegate any of their core functions to the digital platform and must provide direct digital communication channels between the firm and its clients.

Furthermore, brokerage firms are mandated to maintain transparent, real-time disclosures on the digital platform. This includes comprehensive details regarding service, fees and commissions, and the inherent risks of electronic trading. To bolster investor protection and mitigate technological threats, firms must also supply educational resources that empower clients to navigate platforms safely and safeguard the confidentiality of their access credentials.