EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Mohamed Abed and Hamza Shehata, Shehata & Partners Law Firm
3. Robo-Advisers 3.1 Requirement for Different Business Models There are no class assets under the Non-Bank - ing Fintech Law and hence no different business models are mandated on this front. Please note that dealing in cryptocurrency with - out a licence from the CBE is prohibited, accord - ing to the Banking Law. To date, no such licence has yet been issued. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers The FRA recently issued Decree No 57 of 2024, officially introducing robo-advisers into the Egyptian legal system. The Decree defines a robo-adviser as an “electronic system that issues financial advice to form, manage, and rebalance a client’s investment portfolio through the use of algorithms or artificial intelligence algorithms” . As the decree is newly issued, legacy players have not fully adhered to its requirements. The decree limits its application to businesses oper - ating in securities and financial instruments, including stocks, bonds, securitisation bonds, treasury bills, investment fund documents, and traded futures contracts listed and traded on the Egyptian stock exchanges. According to the Decree, the following key requirements must be met. • Minimum capital requirements: companies must have a minimum issued and paid-up capital of EGP15 million at the time of submit - ting the application to the authority. • Cybersecurity insurance: companies must be insured against cybersecurity risks by a
additional compliance responsibilities under the relevant sectoral laws. Failure to comply with such rules exposes them to various penalties, ranging from financial fines to imprisonment. 2.15 Financial Action Task Force Standards Egypt’s AML and sanctions rules generally adhere to the standards imposed by the Finan - cial Action Task Force (FATF). The legal and reg - ulatory framework in Egypt, including Law No 80 of 2002 and the oversight of the Egyptian Money Laundering and Terrorist Financing Combating Unit (EMLCU), ensures alignment with FATF’s recommendations. Egypt is not a member state of the FATF but is a member state of the Middle East and North Africa Financial Action Task Force (MENAFATF), which is an associate member of the FATF. The MENAFATF issued its report on the Egyptian AML and counter-terrorist financing (CTF) meas - ures in 2019, which was certified by the FATF, ensuring the overall compliance and following FATF imposed standards. Through regular updates and participation in mutual evaluations under the MENAFATF, Egypt maintains its commitment to international AML/ CTF standards. 2.16 Reverse Solicitation The Egyptian legal system does not explic - itly regulate reverse solicitation, as it is not addressed under Egyptian law or FRA regula - tions. However, if an Egyptian business intends to engage with an EU-based entity, it must com - ply with EU laws and regulations, particularly the Markets in Crypto-Assets (MiCA) Regulation.
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