Non - Banking Financial
Markets

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Directions of the Financial Regulatory Authority (FRA)

The Authority has worked to implement the strategic plan by evaluating the strategic plan of the previous years. It reviews the developments that have occurred, identifies what has been achieved, sets and discusses the future goals and steps that must be followed to achieve the strategic objectives; this comes within the framework of FRA’s keenness to develop its mechanisms.
It is worth noting that a ministerial decree no. (1294) of 2013 was issued in November 2013 to form FRA’s Board of Directors for a period of four years. By the end of 2013, the Authority has developed a vision for its future directions and its work plan for the years 2013-2018, the future directions includes the following:

Fundamental principles adopted by the Authority
• Striking a balance among supervising and regulating financial markets’ integrity, protecting clients, developing these markets and increasing their attractiveness.
• Setting legislations that regulate various activities in market and seek to update them to be consistent with results of actual practice and best global practices. That is besides introducing new financial products and tools in order to support different economic activities and encouraging expansion and upgrading process.
• Simplifying the procedures of dealing with the Authority and seeking to set timelines for completion.
• Communicating with all parties engaged in the market and raising dealers’ awareness and quick responds to their proposals and complaints.
• Activating Egypt's accession to the liberalization of trade in services agreements, both at the global level (such as the GATS) or at the regional level such as the liberalization of trade in services agreement among the COMESA countries, which aims at establishing a unified region in terms of freedom of movement of goods, services, capitals and employment  among the member states.
• Paying attention to FRA’s staff in terms of developing their skills, motivation and providing them with an acceptable work environment and information structure that suits their work.
• Supporting links, connections and exchanging of information with external financial markets, regional and international organizations which will help in developing non-banking financial services in Egypt.
• Establishing good practices for non-banking financial markets with the aim of contributing to the economic value added to Egypt.
• Supporting the concept of financial inclusion and expanding the base of the clients to include the limited and middle-income categories. That is besides conducting necessary studies for the current situation and identifying the gaps and needs and the coverage of financial services and products
• Conducting studies and gathering information and statistics on the activities of foreign financial markets and publishing their reports

 Lines of action for each activity under FRA’s supervision

Capital Market
• Regulating, supervising and developing the Egyptian Capital Market in the area of disclosure, financial services and dealing with securities in order to enhance confidence in the national economy. Encourage investment, protecting investors and developing legislations and technical environment in accordance with the latest international standards and practices
• Activating Egypt’s accession to the liberalization of trade in services agreements - in the field of capital market - whether at the global level (such as the GATS) or at the regional level such as the liberalization of trade in services agreement among the COMESA countries
• Monitoring the rules of dealing among dealers in trading activities in order to achieve justice and transparency and in order to avoid conflict of interest, that is besides raising awareness of dealers in securities and encouraging investment and development
• Conducting studies and gathering information and statistics on the activities of foreign financial markets and publish their reports
• Ensuring compliance with laws and regulations related to securities activity
• Promoting and encouraging the development of efficient markets, products and services by providing regulatory rules and other means of support in order to enable service providers to develop the market while working on the diversification of financial products in capital market.
• Providing the adequate information and data to all parties in the capital markets at the same time.
• Protecting the rights of investors and concerned parties in the capital market
• Ensuring fair and complete competition through setting high standards of transparency, risk management, governance, market regulation and supervision based on sound and appropriate practices that are comparable in terms of quality, efficiency and effectiveness to the world's leading markets.
• Monitoring the development of non-banking financial institutions to ensure the integrity of their work.
• Protecting small investors.
• Protecting competition and developing activities under FRA’s supervision as well as monitoring the competitive situation are all in the interest of the dealers.
• Continuing to work to meet the economic challenges facing Egypt during (2011-2014)
• Developing  the needed legislative rules
• Increasing liquidity in the market for shares, index funds and debt instruments such as bonds and securitization bonds.
• Providing the appropriate regulatory and supervisory rules in accordance with international best practices and standards in this field.
• Paying attention to the development and rehabilitation of the needed human resources to address the shortage of these resources.
• Combating money laundering and financing of terrorism.
• Activating the role of the Institute of Financial Services through the development of training programs available to those operating in the capital market and holding awareness-raising activities those engaged in the field.
• Enhancing the role of the Egyptian Institute of Directors (EIoD) in the field of governance and issuing updated rules and providing training services at the regional level.
• Participating actively in the events held by the (IOSCO) and regional groupings (the Euro-Mediterranean Association and the Union of Arab Securities Authorities "UASA" )

Insurance:
• Enhancing the standards of regulation and supervision of insurance business in accordance with the international standards and practices of the global regulatory bodies
• Participating in the activities of the International Association of Insurance Supervisors (IAIS) and Forums of Insurance Regulatory Commissions
• Activating Egypt’s accession to the liberalization of trade in services agreements - in the field of capital market - whether at the global level (such as the GATS) or at the regional level such as the liberalization of trade in services agreement among the COMESA countries
• Increasing cooperation with Arab and foreign markets and signing MoUs through exchanging information with the insurance markets members of the international federation. Also, the Egyptian Insurance Market is a member of several regional associations and organizations in order to strengthen this cooperation among members to reach the highest regulatory and supervisory levels of the insurance industry at the local and international levels and in order to maintain the efficiency, integrity, fairness and stability of the insurance markets to protect the rights of the policyholders and to unify efforts to establish effective levels of control through the exchange of information and expertise  so as to enhance for  regulatory methods among markets all around the world to achieve stability and integrity  in global financial markets.  That is besides communication and cooperation between the Arab regulatory bodies in order to strengthen the supervision and control of insurance in the Arab insurance markets.
• Forming a fund to protect the rights of policyholders in the event that insurance companies are unable to pay and fulfill their obligations towards the policyholders. Protecting clients in case of the insurance companies failed to pay for any technical or legal reasons if the inability of companies to pay for reasons beyond its will.  The activation of  this fund needs several stages and the Authority has taken several positive steps to complete it in a way that guarantees the rights of dealers.
• Strengthening insurance intermediary with its varied expertise and specialized technical cadres, through holding some seminars and training courses in the field of insurance intermediary and conducting the needed tests in this regard as one of the basic conditions for obtaining a license from the Authority to practice the profession.
• Reviewing and updating the Authority's rules for handling and managing risks by Egyptian insurance companies with reinsurance companies.
• Reviewing and updating internal supervision and follow-up reports  prepared by FRA for the purpose of emphasizing "risk control" and "early warning indicators".
• Insurance companies shall obtain credit ratings as this will reduce the severity faced by the market faced from reinsurance companies. In addition to  the fact that  if any insurance company obtain a credit rating  this will attract the attention of multinational corporations to deal with it more than other companies, especially that the credit rating will give strength to this company .
• Providing more attractive insurance services to the poorer classes through micro-insurance where it is included in insurance services program at insurance companies. Besides, encouraging companies to open branches in different governorates to support micro-enterprises in order to obtain insurance services and thus providing insurance awareness for micro-projects, which will have a great impact on the activity’s development. That is in addition to improving the level of services provided by  the companies and considering  the quality of service offered to the client is the base of competition between companies in attracting clients rather than price competition.
• Enhancing medical insurance, which is expected to have an effective role in increasing the insurance premiums in the Egyptian market with doubling the rates of growth of medical insurance compared to the current rates.  That is besides introducing new coverage of medical insurance programs in light of the programs applied globally so that the Egyptian insurance market can be guided by.  In addition to the importance of studying and developing medical insurance policies in order to prepare suitable wording and standardize the drafting of different policies in companies.
• Promoting Takaful insurance and encouraging the establishment of companies side by side with the development of its products and introducing new coverage.
• raising clients’ awareness on the importance of risk management, especially as state institutions such as ministries are the most needed to apply methods and standards of risk management during the coming period. In addition, one of the most important risk management tools is to reduce the expected losses in the insurance sector
• Permanent cooperation and coordination with the Central Bank and the Egyptian Postal Authority particularly with regard to the activity of marketing insurance products through banks ( Bancassurance ) as a channel that  meets the needs of clients  dealing with banking institutions.
• Paying attention to issues related to settling disputes of  the dealers with insurance companies in the shortest possible time, by activating the methods of friendly settlement of disputes as a fair and quick justice to the problems of clients  of insurance companies and dealers
• Activating the role of the Financial Services Institute (FSI) through the development of training programs available to insurance companies in particular for (senior management and executive management) and  for the insurance market in general (experts, loss adjusters  and others)

Private insurance funds
• Enhancing private insurance funds to be a regional model while working to increase the ability of these funds to meet their obligations and to maximize its performance in accordance with international standards in the field of supervision and control of fund’s activity, as well as raising the efficiency of private insurance funds technically and administratively and upgrading human resources.
• Striking a balance between supervision and control. Besides, maintaining the stability and transparency of private insurance funds and developing the level of skills and knowledge to support the growth and economic diversification in Egypt
• Activating the role of the Financial Services Institute (FSI) through the development of training programs available to the administrators of private insurance funds management and holding awareness-raising activities for those working in the field.

Mortgage Finance
• Supervising and inspecting of companies and imposing administrative sanctions on companies violating the rules.
• Developing the regulatory framework for mortgage finance according to international best practices
• Developing the institutional framework and controls to protect the rights of market dealers and enhancing transparency
• Setting up the general policies related to mortgage finance while working to overcome the obstacles facing the activity
• Setting financial standards for companies
• Facilitating and simplifying mortgage finance registration system
• Raising awareness of mortgage finance activity
• Activating the role of the Financial Services Institute (FSI) through the development of training programs available to entities operating in mortgage finance and holding awareness-raising activities for those working in the field

 Financial Leasing
• Developing financial leasing market from being a local market to be an international market that allows chartered companies to lease the latest high-tech capital assets under the best conditions while at the same time giving leasing companies the opportunity to rent their capital assets in local markets.
• Studying international experience in the field of financial leasing in order to give this formula the appropriate legislative and legal framework
• Companies shall provide a complete package of financial leasing services and value-added advisory services to help SMEs in achieving  their expansion plans
• Facilitating access to finance for small and micro enterprises and to use movable guarantees as collateral for financing so that investment does not depend on the existence of real estate guarantees; thereby increasing their access to finance through financial leasing.
• Activating the role of the Financial Services Institute (FSI) through the development of training programs available to entities operating in financial leasing and holding awareness-raising activities for those working in the field

Factoring
• Developing products and introducing new products periodically to complete the security elements in the local financial services.
• Monitoring the rules of dealing between dealers in the field of factoring in order to achieve justice and transparency.
• Disseminating statistical information on factoring
• Ensuring compliance with laws and regulations related to factoring
• Activating supervision on factoring.
• Ensuring fair and complete competition between companies operating in this field.
• Monitoring the development of companies working in this field to ensure the integrity of its work.
• Protecting small dealers through examining their complaints.
• Developing the legislative rules in light of its necessity .

Microfinance
• Applying financial transparency and disclosure of the financial and social performance of MFIs
• Protecting microfinance clients, especially borrowers while ensuring access to the largest number of clients
• Ensuring that the microfinance company treats clients well and does not resort to illegal or immoral practices while collecting debts
• Ensuring  that microfinance companies provide adequate means to assess the creditworthiness of the client, including obtaining the client's credit report from credit rating companies before granting the loan in order to improve the client's credit analysis and protect him from falling into excess debt.
• Maintaining the confidentiality of client’s personal information, and not to disclose it without his prior permission
• Enhancing the role of financial inclusion in promoting economic and social stability and achieving sustainable development in supporting small, medium and micro enterprises and facilitating their access to finance.

The Authority’s institutional structure
Organizational structure:
• Creating new functional names to open up paths for outstanding empolyees
• Supporting specialization in activities and accumulation of experience

Human Resources:
• Activating employees’ training programs and developing their skills either through the Financial Services Institute (FSI) or local or external courses
• Following-up job vacancies, especially in specialized technical posts where there is a severe shortage
• Encouraging earning certified professional certificates through granting financial incentives in this regard and granting a performance incentive to distinguished employees

Electronic services
• The Authority is working to improve its capacity in collecting and storing information and data to support its work, this includes the classification of FRA’s information and data and building mutual relations between them and ensuring its quality to meet the requirements of FRA’s work. This is in addition to building and activating the functions of information and data management through the development of information systems management policies and procedures
• Enhancing FRA’s services and developing the electronic services