Mohamed Omran, the Chairperson of the Financial Regulatory Authority (FRA), issued Regulatory Decision No. 25 of 2022, which obliges companies to seek its prior approval before conducting due diligence examinations.
The decision adds a new paragraph to the text of Article 8 of the licensing controls and the rules for owning shares of companies operating in non-banking financial activities.
It stipulates that it the FRA’s prior approval is required to to conduct due diligence examinations for any of the companies operating in non-banking financial activities, and before reviewing the internal data and information of those companies to take a final investment decision.
This came after the FRA’s Board of Directors held a meeting on Sunday in which they approved the amendment to Resolution No. 53 of 2018 regarding the controls for granting a license.
The authority’s Board of Directors agreed to extend the scope of settling disputes that arise between companies and their clients. Two new Dispute Resolution Committees were formed in the non-banking financial sector in the field of securities.
The first is concerned with looking into the complaints the FRA handles in the field of securities and clients. The second is concerned with looking into complaints and issues raised between companies working in the field of non-banking financing and clients. This includes real estate financing activities; financial leasing; factoring; financing micro-, small-, and medium-sized enterprises; as well as consumer financing in accordance with Resolution No. 27 of 2022.
Omran said that the FRA’s Board of Directors — in accordance with Law No. 10 of 2009 — is the supreme authority in charge of managing its affairs and setting and implementing the necessary policies to achieve its objectives.
Since one of the authority’s objectives is to work on the safety and stability of non-banking financial markets as well as their regulation, development, and balances, the board considered expanding the scope of the mechanism for managing disputes that arise between companies operating in the field of non-banking financial activities and their clients.
This would achieve stability within the activities subject to the supervision and control of the authority.
Furthermore, Omran stated that the follow-up of the performance of the Dispute Resolution Committee has resulted in the speedy settlement of insurance disputes and ensuring that beneficiaries of insurance contracts obtain their rights without any delay and with justice and objectivity.
This also highlighted the important role of the great practical experience enjoyed by the members of the Dispute Resolution Committee and their ability to end disputes without resorting to courts in a way that saves expenses, effort, and time.
According to Omran, the two new committees will look into complaints and disputes referred to them by the authority. The committees must then issue a decision regarding a dispute within a month from the date it was presented to them.
The disputing parties must be informed of the committee’s decision five to 10 working days from the decision’s issuance date.
