Registering Foreign Entities as Dep
Registering Foreign Entities as Deposit Banks
The Egyptian Financial Supervisory Authority ("EFSA") recently issued a decision amending existing regulations concerning the registration of foreign entities as depository banks and beneficial owners. The decision focuses on the process for registering foreign entities and for the timeline related to the issuance of license, and sets out the responsibilities of both the applicant and the two relevant regulatory authorities, namely EFSA and the Central Bank of Egypt ("CBE").
EFSA's Decision No. 157 of 2014 repealed the requirement previously placed on foreign entities applying for registration as banks to obtain prior approval of CBE (the "Decision").[1] Instead, the new Decision requires foreign entities registering as depository banks to apply directly to EFSA, and requires EFSA to inform the Central Bank of such an application. Should CBE have any comments related to the application, this would have to be relayed to EFSA within one week of the date the Central Bank is informed of it. This stands in contrast with the previous decision (Decision No. 17 of 2014) which did not specify a specific time frame for CBE to decide whether to approve the foreign entity’s application or not.
From the above, one can conclude that the amendment did not completely oust the jurisdiction of the Central Bank – as it still gave it the right to make notes and comments about the application for registration. However, the new rules mean that the regular process assumes the Central Bank’s approval of registration and that opposing such registration requires an additional step to be taken.
[1] EFSA Board of Directors' Decision No. 157/2014 amending Decision No. 17/2014 concerning the registration of foreign entities as depository banks and beneficial owners, Official Gazette, Issue No. 285, 17 December 2014.
The Egyptian Financial Supervisory Authority ("EFSA") recently issued a decision amending existing regulations concerning the registration of foreign entities as depository banks and beneficial owners. The decision focuses on the process for registering foreign entities and for the timeline related to the issuance of license, and sets out the responsibilities of both the applicant and the two relevant regulatory authorities, namely EFSA and the Central Bank of Egypt ("CBE").
EFSA's Decision No. 157 of 2014 repealed the requirement previously placed on foreign entities applying for registration as banks to obtain prior approval of CBE (the "Decision").[1] Instead, the new Decision requires foreign entities registering as depository banks to apply directly to EFSA, and requires EFSA to inform the Central Bank of such an application. Should CBE have any comments related to the application, this would have to be relayed to EFSA within one week of the date the Central Bank is informed of it. This stands in contrast with the previous decision (Decision No. 17 of 2014) which did not specify a specific time frame for CBE to decide whether to approve the foreign entity’s application or not.
From the above, one can conclude that the amendment did not completely oust the jurisdiction of the Central Bank – as it still gave it the right to make notes and comments about the application for registration. However, the new rules mean that the regular process assumes the Central Bank’s approval of registration and that opposing such registration requires an additional step to be taken.
[1] EFSA Board of Directors' Decision No. 157/2014 amending Decision No. 17/2014 concerning the registration of foreign entities as depository banks and beneficial owners, Official Gazette, Issue No. 285, 17 December 2014.