EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Mohamed Abed and Hamza Shehata, Shehata & Partners Law Firm
licensed insurer authorised by the authority, whenever available. • Algorithmic transparency: the AI technology used must be transparent and auditable, with clear documentation and oversight proce - dures. • Human oversight: companies must maintain a qualified team with expertise in both algo - rithmic methodology and the technological aspects of the service. • Qualified management and team: a responsi - ble manager, approved by the authority, must oversee the program’s operation. The com - pany must also employ a qualified team with expertise in algorithmic methodologies and relevant technologies. If outsourcing develop - ment, the provider must meet the required experience and competency standards. Furthermore, the following measures should be taken to safeguard clients of the robo-advisory services. • Evaluating client suitability: robo-advisers must assess a client’s suitability for specific investments based on their risk tolerance and financial situation. • Client awareness: clients must be informed of the potential risks associated with automated investing and retain an option to discontinue transactions whenever they choose. • Transparent agreements: all client agreements must be clear and written in Arabic, explicitly detailing the service provided, applicable fees and the procedures for resolving disputes. Robo-advisory services cover significant advan - tages, such as: • broader access to financial services – robo- advisers are set to make financial services
more accessible to a wider audience, promot - ing greater financial inclusion; • strengthened market dynamics – by foster - ing innovation, the new regulations aim to enhance competition within Egypt’s financial sector; and • expansion of the fintech ecosystem – the regulatory framework is expected to stimulate the emergence of fintech start-ups, driving growth in the industry. 3.3 Issues Relating to Best Execution of Customer Trades The Non-Banking Fintech Law in Egypt provides a foundational framework for the regulation of various fintech activities. However, it is prema - ture to address specific practical issues, such as the best execution of customer trades, within the broader fintech sector. The law is still in its early stages, and the regulatory interpretations of certain aspects, such as best execution, will require time to evolve.
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
Online loans, which involve the disbursement of fiat currency (government-issued money not backed by a physical commodity), can be pro - cessed through either the banking fintech sector or the non-banking fintech sector. Banking Fintech Sector The CBE’s updated regulations on mobile pay - ments now pave the way for instant digital lend - ing via mobile phones. This allows banks to bypass the traditional branch visits and disburse loans electronically through approved mobile payment services.
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