EGYPT Trends and Developments Contributed by: Mohamed Hashish, Farida Rezk, Omar Aboul-Ella and Mariam Rabie, Soliman, Hashish & Partners
banks in Egypt, which will effectively allow for the establishment and operation of digital banks, in an effort to support innovation and transforma - tion of the digital economy, whilst representing an important step in aligning with global develop - ments in the financial technology industry. Furthermore, in January 2024, the FRA issued Decree No 286 of 2023 regarding the rules and procedures for the establishment and licensing of emerging financial technology companies to engage in non-banking financing activities. The Decree applies to a variety of non-banking financing activities, including, inter alia, real estate financing, consumer financing and fac - toring. The Decree stipulates the conditions required to enable the incorporation of a non- banking financing company, as well as the pro - cedures for obtaining the required licence to engage in such activities. Additionally, in November 2024, the FRA issued Decree No 163 of 2024 regarding the establish - ment and operation of the testing platform of the FRA in accordance with the Fintech Law, which stipulates that the FRA shall establish a regulatory testing platform or sandbox within which licence applicants for non-banking finan - cial activities can test their fintech products in a live regulatory environment with real consumers for a period of time in preparation for providing them to clients, under the supervision and over - sight of the FRA. Accordingly, the Decree has established the aforementioned testing platform, allowing start-ups practising non-banking finan - cial activities to test their fintech for the purpose of supporting and facilitating the entry of smart start-ups into the market, enhancing regulatory understanding of fintech and improving regu - latory practices in support of sustainable and inclusive financial growth.
Furthermore, in 2024, the FRA issued Decree No 57 of 2024, which establishes the rules for regu - lating the operation of Robo-Advisors for Invest - ment. A Robo-Advisor is an electronic system that provides financial advice to clients for the purpose of creating, managing and rebalanc - ing an investment portfolio using AI algorithms. The FRA highlighted that portfolio management companies are now authorised to provide auto - mated investment advice via Robo-Advisors. It is also worth noting that in 2024, the FRA issued Decrees No 140 and No 148 of 2024 establishing special purpose acquisition compa - nies (SPACs) in Egypt and has recently approved the first application for a SPAC, which is defined as a company licensed by the FRA solely to raise a cash fund, through an initial public offering, for the sole purpose of acquiring or merging with an operating business within a specific timeframe. Data Protection In 2020, Egypt introduced the Law on the Pro - tection of Personal Data No 151 of 2020 ( “Data Protection Law” ), which regulates personal data that is processed electronically. Prior to the issu - ance of the Data Protection Law, data protection was only governed by the Constitution, Penal Code No 58 of 1937 ( “Penal Code” ) and Law No 175 of 2018 on Anti-Cyber and Information Technology Crimes ( “Cybersecurity Law” ). The Data Protection Law is a reflection of the Euro - pean General Data Protection Regulation (Reg - ulation (EU) 2016/679), as it aims to establish various standards and rules that safeguard data protection and the rights of individuals in Egypt. However, the Executive Regulations of the Data Protection Law have not yet been issued at time of writing. There are certain types of personal data that are not subject to the Data Protection Law, including, inter alia, data held by the CBE.
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