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The Financial Regulatory Authority and its activities

الهيئة العامة للرقابة المالية - The Financial Regulatory Authority

Due to growth of the financial and financing institutions, the new types of financial instruments as well as the needs of most companies and even countries to securities such as bonds, treasury bills, sukuk, etc., to solve financing issues, the Egyptian state enacted laws and regulations to regulate the work of non-banking financial markets.

The Financial Regulatory Authority (FRA) is a public Authority, having an independent legal status, established in accordance to law 10 of the year 2009 to be responsible for supervising and regulating non-banking financial markets and instruments and to regulate the market and ensure its stability and competitiveness to attract more local and foreign investments.

The mandate of the Authority also includes limiting inconsistency risks and addressing problems arising from applying different supervisory rules, the non-banking financial markets and instruments include:

  1. Capital Market.
  2. The Exchange.
  3. All activities related to Insurance Services.
  4. Mortgage Finance.
  5. Financial Leasing.
  6. Factoring.
  7. Securitization.

Under Articles 215, 216, 217, 218, and 221 of the Constitution of the Arab Republic of Egypt, FRA became an independent body within four independent bodies by virtue of the constitution: the Administrative Control Authority, the Central Bank, and the Central Auditing Organization.

The constitution also guarantees for FRA to have public legal personality, impartiality, and independence in all financial, administrative and technical aspects, to ensure that it carries out its duties in controlling and supervising non-banking financial markets and instruments.

According to said law no 10 of the year 2009, FRA replaced the Egyptian Insurance Supervisory Authority (EISA), the Capital Market Authority (CMA), and the Mortgage Finance Authority (MFA) in application of the provisions of the supervision and regulation of Insurance law no. 10 of 1981, the Capital Market law no. 95 of 1992, the Depository and Central registry law no. 93 of 2000, the Mortgage Finance law no. 148 of 2001, as well as other related laws and decrees that are part of the mandates of the above authorities. FRA is also the admin authority for companies established under the provisions of law of financial leasing issued by law no.95 for year 1995.

FRA’s Objectives

In applying to his roles, the main objectives of FRA are:

  • Maintaining stability and soundness of non-banking financial markets.
  • Regulating and developing non-banking financial markets.
  • Protecting rights of stakeholders.
  • Issuing various means, systems, and rules ensuring efficiency and transparency of these markets.

FRA’s authorities

Specific authorities have been given to FRA as follows:

  • Licensing entities to operate in non-banking financial activities.
  • Inspecting licensed entities operating in non-banking financial activities.
  • Regulating the dissemination of information related to non-banking financial markets.
  • Ensuring transparency and competitiveness of non-banking financial services through applying sound rules and regulations protecting rights of non-banking financial market stakeholders.
  • Taking necessary actions to curb market manipulation and fraud.
  • Supervising training of market participants and sharpening their skills.
  • Cooperating and coordinating with other non-banking regulatory bodies abroad to develop and boost efficiency and effectiveness of supervision means and methods in non-banking financial markets.
  • Communicating, cooperating, and coordinating with societies and organizations, which organize work of financial regulatory authorities across the globe in an effort to sustain FRA’s capabilities in alignment with best international practices.
  • Contributing to disseminating investment culture and financial awareness.

Roles of the Financial Regulatory Authority

The Authority, in pursuit of achieving the purposes for which it has been established, roles of FRA are as follows:

  • License non-banking financial activities.
  • Inspect licensed entities engaged in non-banking financial activities.
  • Regulating the dissemination of information related to non-banking financial markets.
  • Ensure transparency and competitiveness in non-banking financial services through proper regulation of non-banking financial markets.
  • Protect non-banking market investors’ rights.
  • Take necessary measures to limit market manipulation and fraud.
  • Supervise training of market participants.
  • Cooperate and coordinate with other non-banking regulatory bodies abroad, thus developing and increasing efficiency of means and methods of supervision in non-banking financial markets and instruments domains.
  • Communicate, cooperate and coordinate with societies and organizations which regulate work of financial supervision authorities across the globe, thus empowering the Authority to assume its competences according to the best international practices.
  • Contribute to spreading investment culture and awareness.

Objectives of the Financial Regulatory Authority

In accordance with Article Ten of Presidential Decree No. 193 of 2009 issuing the Statute of the General Authority for Financial Supervision, including general framework for FRA, in particular the following:

  • Developing the Authority’s general strategy and executive policies and monitoring their implementation.
  • Laying down the executive rules to regulate the activities that the Authority is competent to control.
  • Setting the rules of control and inspection of the subject entities and individuals subject to the Authority’s supervision.
  • Determining fees for the services provided by the Authority to others.
  • Approving the organizational structure of the Authority, the financial and administrative regulations, and personnel affairs, without being bound by the regulations and systems in force in public and governmental bodies in this regard.
  • Setting rules for the use of local and foreign expertise to assist the Authority in carrying out its work.
  • Approval of the Authority’s discretionary budget and its closing account, and setting the rules for investing the Authority’s funds.
  • Determining the categories of the development fee stipulated in Article Fourteen of Law No. 10 of 2009.
  • Expressing an opinion on all draft laws, regulations and decisions related to the Authority’s competence in non-banking financial markets and instruments.

 

Finally, the General Authority for Financial Supervision has made many and distinguished efforts recently and has presented many brochures and publications introducing the authority and its activities.

For example, the authority participated in the Cairo International Book Fair for the year 2023 and had an active participation during which it presented many brochures and publications introducing the authority and its activities. These publications and booklets were very popular among the visitors of the exhibition, and the authority is still presenting one initiative after another in order to achieve its social role in raising awareness of non-Egyptian financial activities and their advantages for the national economy within the framework of the state’s plan for financial inclusion.