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State Council’s President and FRA’s Chairman inaugurated a seminar on the safety and stability of non-banking financial activities

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• Dr. Omran: State Council’s specialization and expertise enhance legislations of non-banking financial markets in Egypt in accordance with the provisions of the Constitution

• Dr. Omran: Total premiums of property and life insurance is 21.9 billion EGP within nine months of 2018

• Dr. Omran: Total trading value of listed and unlisted shares on the Egyptian Stock Exchange and Nile Stock Exchange was 32.8 billion EGP during September 2018

Dr. Mohammed Omran, FRA’s Chairman stated that without sophisticated and strict legislations, the Authority could not have perform its regulatory duties.  He added that for the fifth year in a row a progress was achieved in Egypt’s ranking on “Protecting the rights of small shareholders” index in World Bank Doing Business Reports where Egypt jumped 9 places.  He pointed out that such progress could not have been achieved without being preceded by a number of coordination steps taken by the regulator with the state’s different Bodies linked with the legislative process, that is to strengthen the frameworks and legislative structure of the non-banking sector.

This came during the opening session of the second panel discussion held by judges of the State Council entitled “FRA’s role in achieving the Safety and Stability of Non-banking Financial markets and Instruments, their regulation and Development”. The discussion was organized by the Authority in cooperation with the State Council and the USAID with the participation and attendance of the State Council President and State Council’s judges.

State Council’s President- Ahmed Abou Al-Azm emphasized that the Council’s judges are keen to exchange experiences and to be updated with various economic legislations in non-banking financial activities. Also,  he stressed on the importance of discussing the technical considerations of each activity in a manner that  form the economic backgrounds – on a scientific and practical basis- which the judges will take as a guide upon  reviewing legislations on non-banking  financial markets and instruments,  and which will be a guidance  upon  giving  the legal opinions on cases submitted by related departments and  Fatwa committees.  That is besides showing its impact on the Authority’s regulatory role and mechanisms in accordance with the provisions of the Constitution and Law.

FRA’s Chairman explained that the two days specialized program will inform the attendees of the latest developments that occurred in the legal frameworks governing the non-banking financial activities under FRA’s supervision. He noted that the program will shed lights on major amendments – issued in March this year – to the Capital Market Law since more than 26 years.  FRA’s Chairman added that the new amendments introduced Futures Exchange’s rules. In addition, the said amendments regulated the process of corporation and licensing companies operating in Future’s Exchange and the conditions to be met by these companies, besides setting a definition for (futures contracts, options contracts and swap contracts). Moreover, the seminar included the most important features that characterized capital market activity. Noting that the total trading value of listed and unlisted shares on the Egyptian Stock Exchange and the Nile Stock Exchange reached 32.8 billion EGP during September 2018. Whereas,  the total number of approvals for issuing corporate shares and capital increase shares were 395 approvals with a total value of 8.1 billion EGP and rate of change of 13.6% all over September 2017.

This in addition to the re-organization and issuance of Sukuk and its trading system as one of the types of securities being regulated by public or private offering and traded in accordance with the Capital Market Law. That is besides allowing   companies operating in non-banking financial activities to undertake the activity of mutual funds themselves without establishing a company for this purpose.

Dr. Omran pointed out that the seminar will present Risk-Based Supervision (RBS) applied on insurance companies operating in Egypt – in line with the internationally recognized regulatory frameworks which has been adopted by the Authority upon regulating insurance activity. It is worth mentioning that the total of property and life insurance was about 21.9 Billion EGP during the nine months of 2018. The Egyptian insurance companies paid compensation for life and property activities with a total value of 9.8 billion pounds for the same period.

The seminar will shed light on the mortgage finance system under FRA’s supervision, the new financing formulas and the legal framework and regulations issued by FRA’s Board of Directors to regulate mortgage finance.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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