The Determination of the Competent Minister with Respect to the New Non-Bank Financial Regulator: Presidential Decree Accords the Competence to the Minister of Investment
The New Non-Bank Financial Regulator: Background
The March 2009 Egypt Legal Update described in detail the provisions of Law Number 10 of 2009 which provided for the establishment of a new regulatory agency called “the General Authority for Financial Supervision” (EFSA) to be the unified regulator for all non-bank financial activities including capital markets, insurance, mortgage finance, financial leasing. The Law also provided for the merger of the existing regulators for insurance, capital markets and mortgage finance in the new entity. Banks, however, will continue to be supervised by the Central Bank of Egypt.
The Determination of the Competent Minister
Law Number 10 had stated that the President of the Republic would issue a decree determining the competent minister in the application of its provisions. This was undertaken recently with the issuance of Presidential Decree Number 93 of 2009 (published in the Official Journal on March 25th, 2009) which determined the Minister of Investment to be the competent minister for the purposes of the Law. It is worth noting – as discussed in detail in the March 2009 Egypt Legal Update – that the Minister’s oversight in this respect is political, since the Law clearly states that the new authority is to be operationally independent.
Next Steps
The recent Presidential Decree completes one of the key steps towards the activation of the new regulatory agency. This should allow it to come into operation on July 1st, 2009 which is the date determined in the Law to be its starting date and also the date upon which the currently existing regulatory agencies will merge into it by operation of law.
The New Non-Bank Financial Regulator: Background
The March 2009 Egypt Legal Update described in detail the provisions of Law Number 10 of 2009 which provided for the establishment of a new regulatory agency called “the General Authority for Financial Supervision” (EFSA) to be the unified regulator for all non-bank financial activities including capital markets, insurance, mortgage finance, financial leasing. The Law also provided for the merger of the existing regulators for insurance, capital markets and mortgage finance in the new entity. Banks, however, will continue to be supervised by the Central Bank of Egypt.
The Determination of the Competent Minister
Law Number 10 had stated that the President of the Republic would issue a decree determining the competent minister in the application of its provisions. This was undertaken recently with the issuance of Presidential Decree Number 93 of 2009 (published in the Official Journal on March 25th, 2009) which determined the Minister of Investment to be the competent minister for the purposes of the Law. It is worth noting – as discussed in detail in the March 2009 Egypt Legal Update – that the Minister’s oversight in this respect is political, since the Law clearly states that the new authority is to be operationally independent.
Next Steps
The recent Presidential Decree completes one of the key steps towards the activation of the new regulatory agency. This should allow it to come into operation on July 1st, 2009 which is the date determined in the Law to be its starting date and also the date upon which the currently existing regulatory agencies will merge into it by operation of law.