Cairo: The Financial Supervisory Authority has given the green light to three companies to engage in securities brokerage using financial technology. This move is part of a broader initiative to digitize non-banking financial transactions, following the enactment of Law No. 5 of 2022, which aims to regulate and enhance the use of financial technology in non-banking financial activities.
According to State Information Service Egypt, the authority has stipulated that any company wishing to incorporate financial technology into non-banking financial services must adopt robust mechanisms and methodologies for managing and governing technological risks. This is to ensure the smooth operation of services and safeguard client rights while maintaining financial stability.
Previously, the Financial Supervisory Authority had sanctioned the registration of four companies as outsourcing service providers in technology, in line with the regulatory framework provided by Law No. 5 of 2022 and subsequent decisions by the Authority’s Board of Directors. These companies have initiated contracts with over 80 financial institutions within the non-banking sector.
By allowing securities brokerage firms to utilize financial technology, the authority aims to streamline investment procedures in the stock market. This digital transition will enable more citizens to participate in the stock exchange by allowing them to open accounts and commence investments entirely online, eliminating the need for physical branch visits or document submissions.
The adoption of financial technology in the brokerage sector is expected to simplify the processes of account opening and trading, potentially reducing time and costs for clients. It will also widen access to financial services, particularly for young people and financially excluded groups. The reliance on digital solutions is anticipated to accelerate transaction execution and minimize human errors, thereby enhancing market efficiency and fostering greater confidence in non-banking financial activities.