A set of new laws in the arsenal of the Egyptian Financial Supervisory Authority

Hisham Ramadan, Assistant Chairman of the Financial Supervisory Authority, and Dr. Islam Azzam, Senior Adviser to the Chairman of the Authority, revealed the most prominent developments of the set of laws being issued, including the unified insurance law and “commercial transactions”. cleaning up” as well as “reorganization of the government” and “finances.” alternative”.

Ramadan said that the law on the reorganization of the authority referred to by the comprehensive strategy for non-bank financial activities 2026/2022 includes the development of the institutional framework.

Ramadan explained that the authority proposed to revise the law that regulates the authority based on the independence guaranteed to it by the constitution in article 215, which granted independence to the authority reflected by a law subsequently issued by the competent authority to organize the authority. work of the authority, its powers, and its material and administrative independence, or what is known, institutional framework or management.

He pointed out that the law reorganizing the government includes two proposals; The first is the preparation of an independent law, and the second is the amendment of Law No. 10 of 2009, in order to achieve material and administrative independence and reflect the organizational frameworks of the authority, emphasizing that the second proposal has been called in, and the matter is now before the Council of Ministers.

Alternative Financial Law

In relation to the alternative financing law, the Vice-President of the Financial Supervisory Authority confirmed that there are two proposals; The first is to prepare a separate new law or make amendments to the current one, regarding consumer or microfinance, or others, bearing in mind that the choice of one of the proposals has not yet been decided.

He referred to studying an amendment to the Consumer Finance Act, which would allow financing for periods of less than 6 months through financial technology.

He pointed out that work is underway to prepare controls to allow finance companies to provide personal loans to customers, in preparation for presenting them to the authority’s board of directors in its new session, and then to take his role in the Council of Ministers and Representatives.

He added: We are studying different types of financing and lending using financial technology, and how to integrate it into existing laws for non-bank financial services, such as the crowdfunding law.

He pointed out that there is a joint committee between the government and the central bank that is working to formulate and crystallize the basic provisions that must be available in the alternative financing law. As for the rest of the financing, it will be more linked be to the central bank and its amendments.

United Insurance and Government Assets

Regarding the unified insurance law, Ramadan said that it was approved by the Cabinet to amend the basic article on the minimum insurance companies and increase it from 150 to 250 million pounds with the amendment of some other articles.

He explained that the unified insurance law is in the final reading phase of the Economic Committee of the House of Representatives in preparation for its presentation and approval by the plenary session.

In the context of securing government assets, Ramadan said that it was an initiative by the authority, and as a result, a committee was formed under the leadership of the Ministry of Finance and with the participation of various government agencies that ended up providing various recommendations.

He pointed out that in principle the committee recommends the importance of the state insuring its vital assets, whether operational or serviceable, such as electricity and water plants and all assets.

He pointed out that the recommendation includes the inauguration of a state insurance fund under the supervision of the state, and it determines how to insure its assets, but its form has not been settled, either directly from the fund or through ordinary insurance companies, or by other funds, explaining that the fund will have the right to reinsure. .

Ramadan emphasized that the recent climate changes and the noticeable impact of rising temperatures will encourage the state to manage risks through the insurance system and reconsider the implementation of the institutional framework for insurance on state assets.

personal loans

He emphasized that the mechanism of personal loans to finance companies needs a legislative amendment, pointing out that it has not been decided to place the mechanism under microfinance or consumer finance, especially since there is an integration between these activities.

He pointed out that among the new products that are also being studied is the deferred sales financing for consumer finance companies, so that the customer now and then pays later, either in one payment or several payments after a certain period, adding that it can be a separate license or be an activity under an existing license.

Commercial Transactions Clearing Law

In turn, Dr. Islam Azzam, Senior Advisor to the Chairman of the Authority, said that the Act on the Settlement of Commercial Transactions applies to all future contracts.

Azzam explained that there are ongoing consultations with the Central Bank to prepare the law, in addition to the European Bank for Reconstruction (EBRD) for technical assistance and knowledge of the experiences of other countries.

He pointed out that the technical studies of the futures exchange have been completed, and a meeting with interested and prospective shareholders is expected.

He said that the futures exchange would initially focus on contracts derived from securities, noting that at a later stage it would include the listing of commodities, either through a separate exchange or under the Derivative Contracts Exchange.

He added, “There is great interest from financial institutions to contribute to the futures exchange, according to preliminary preliminary meetings.”

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