• Dr. Omran: The six basic principles of Financial Consumer Protection represent the goals and objectives of the guidance
Dr. Mohammed Omran – FRA’s Chairman revealed that the Authority will issue the first guidance on Financial Consumer Protection, adding that the non-banking financial sector includes capital market, insurance, private insurance funds, mortgage finance, financial leasing , factoring, securitization and microfinance.
The Authority aims at developing principles on financial consumer protection in order to enhance transparency and disclosure in financial transactions within a balanced relation that protect their rights. Consequently, this will ensure fairness and transparency and will provide non-banking financial products and services at reasonable cost and high quality.
FRA’s Chairman added that financial consumer protection is a global trend of great importance within the general policies of various countries, especially in light of the difficulty of making financial decisions in financial markets characterized by diversity of their products and difficulty of recognizing the risks faced by individuals.
In order to prepare this guidance, the Authority has reviewed best practice in many countries and has used the best international standards on financial consumer protection by international financial institutions such as the Organization for Economic Co-operation and Development (OECD), the United Nations Conference on Trade and Development (UNCTAD) and the European Union (EU). Upon the issuance of the said guidance, the Authority relied heavily on the World Bank’s Good Practices for Financial Consumer Protection – 2017 report.
A large team of experts prepared this guidance which aims at achieving several strategic objectives, including the integration of individuals in financial inclusion system and spreading financial education and awareness policies within the legal framework that provides consumer protection through fair transactions and disclosure , improving their financial culture and providing financial services within a competitive atmosphere and in the framework of professional conduct, taking into account confidentiality and privacy of personal data, as well as reducing the risks facing individuals by providing appropriate compensations and remedies and settling any disputes or complaints that may arise between them and financial institutions that provide them with financial products and services.
Dr. Omran pointed out that the first version has already been completed and will be sent to related parties such as the Egyptian Stock Exchange, MCDR , the Egyptian Capital Market Association (ECMA), and the Federation of Companies under the Authority’s supervision , such as the Insurance Federation of Egypt, 20 major private insurance funds, the Egyptian Microfinance Federation (EMF) ,financial leasing and Factoring Federation and the Egyptian Union of Microfinance this is within the framework of an expanded community dialogue and collecting various views on the basic principles included in this guidance in order to enrich the experience and obtain the best practices that lead to financial consumer protection .
The proposed guidance is about 80 pages containing six basic principles: (1) Disclosure and transparency. (2) Conduct and professionalism. (3) Justice and non-discrimination among clients. (4) Confidentiality and privacy of personal data. (5) Complaints handling and dispute resolution. (6) Guarantees and remedies.
FRA’s Chairman stated that due to the variety of activities under FRA’s supervision and its different nature and technical basis, the Authority will issue a compilation guide for all activities and separate ones for each activity