The Board of Directors of the Financial Regulatory Authority (FRA), headed by Mohamed Farid, issued Resolution No. 249 of 2023, amending the Authority’s Board of Directors Resolution No. 53 of 2018. The new resolution sets the rules for granting a licence to own shares in non-banking financial companies. It aims to regulate the participation and ownership of companies that are under the Authority’s supervision. This will help achieve financial stability for non-banking financial institutions and enable them to provide their services to customers efficiently and effectively. FRA ensures the safety and stability of non-banking financial markets, regulates and develops them, and balances the rights of all transacting parties.
The resolution stipulates that the minimum percentage of the financial institution’s contribution to the capital of non-banking financial companies is 25% of the company’s capital. The resolution also stipulates that women must have at least 25% representation on the board of directors.
Additionally, the resolution specified some requirements for companies operating in certain non-banking financial activities, such as insurance companies.
Moreover, the resolution states that insurance and reinsurance companies must own at least 25% of the capital of any company wishing to practice insurance activity, provided that it has a credit rating from one of the international rating agencies.
The resolution defined the qualified investor as a natural person with at least 10 years of experience in the field of money management and investment, direct investment, or fields related to non-banking financial activities, provided that the value of the liquid assets, securities, or financial instruments owned is no less than EGP 10m.
The resolution obligated companies to complete the incorporation procedures within six months from the date of the Authority’s initial approval. The Authority may extend that period based on justifications accepted by the Authority. The companies must also start operating within six months from the date of obtaining the license, which may be extended after the Authority’s approval.
