Egyptian Financial Supervisory Authority (EFSA)

The Egyptian Financial Supervisory Authority is an entity that regulates a broad array of financial services in Egypt. The organization rebranded in 2017, shortening its name to Financial Regulatory Authority (FRA). Like similar authorities, Egypt’s FRA has a formidable range of obligations and a significant area of authority. The agency is government-integrated and watches over the entirety of Egypt’s non-banking transactions. That means it covers derivative markets, capital markets, insurance, commodities, mortgage fees, and others.

The FRA in Egypt is a relatively young entity as far as national financial regulators go. Law number 10 established the FRA’s functioning early in 2009, more precisely in February. The Authority started its operations slightly later in the same year, on July 1st. The then-called EFSA replaced three significant financial entities which used to do its job. The three were the Mortgage Finance Authority, the Capital Market Authority, and the Insurance Supervisory Authority.

The change from three regulators to one was meant to make the conduction of rules simpler and fairer. The desired effect was to foster the growth and health of Egypt’s financial sector. Namely, the formation of the FRA came as a part of a broader overhaul of the country’s securities and financial sectors. It was a part of a response to the global economic crisis of 2007-2010 that emphasized the importance of financial market stability.

After the Egyptian revolution of 2011, the entity’s leadership changed. Ashraf El-Sharkawy became the figurehead of the Authority. Currently, Dr. Mohammed Omran serves as the authority’s chairman.

Goals

The aims of Egypt’s Financial Regulatory Authority are largely in line with what you’d expect from such an entity. Its primary purpose is to ensure the proper functioning and stability of financial markets. However, the FRA’s authority doesn’t include banking markets or systems. It also participates in the regulation and development of said markets.

A part of ensuring financial markets work properly is ensuring the safety of those that participate in them. As such, another vital role the FRA plays is the protection of stakeholder rights. In part, it does that by issuing means and systems that ensure markets function regularly. That includes securing maximum transparency as far as the areas the FRA regulates go.

To achieve these goals, the FRA employs a team of competent individuals. However, let’s see the exact role the FRA plays in ensuring their goals are met.

EFSA Roles

As a part of FRA’s goal of ensuring market competitiveness and fairness, it also works to simplify legal systems. Ideally, that’d lead to a larger degree of understanding and shareholder education. It also works on boosting financial inclusion and stability by empowering somewhat marginalized groups. As such, it has ensuring youth and minority empowerment and gender equality as part of its roles.

The FRA is currently working on becoming a competent platform to combat financial misconduct. As such boosting disclosure, thus increasing transparency, as well as fighting corruption are consistent tasks. Furthermore, it also works on molding and adapting a long-term national strategy that’d aid the development of Egypt’s financial sector. The Authority hopes to accomplish its goals as a part of a broader Egypt 2030 plan.

The organization also has a slightly more specific strategic objective plan that it employs. It boosts financial inclusion rates, which leads to more sustainable development. The goal is to increase microfinance beneficiaries from 2.5 million now to 4 million in the future. It also plans to increase the number of microfinance institutions (MFIs) to no less than 1000. That’d allow entities under FRA to grant more microfinance loans more loans, with a goal of raising the total amount from 11.5 billion EGP to 15 billion EGP.

Naturally, it also works on expanding Egypt’s economic competitiveness and including overseas investors. To support a larger investor base, it also works on legislative and technological improvements in the area of finance. The FRA has a special focus on innovative and unorthodox problem solving.