Egyptian President Mohamed Hosni Mubarak issued Presidential Decree No. 192/2009 concerning the principle system of the General Authority for Financial Supervision. The Presidential Degree was issued in three chapters detailing the legal status of the Authority, key objectives and role(s). The Decree also outlined the Authority's managerial and financial systems.
The Minister of Investment, Dr. Mahmoud Mohieldin stated that the Presidential Decree issued by President Mohamed Hosni Mubarak concerning the principle system of the General Authority for Financial Supervision has been based on Law No. 10/2009, which is concerned with market supervision as well as the supervision of the instruments concerning non-bank financial services. The Law aims at consolidating the role of the state in tightening market supervision as well as unifying supervision over non-bank financial services under the single regulatory umbrella of the General Authority for Financial Supervision, which will assume its duties as of the beginning of July 2009.
The Minister of Investment explained that the first chapter of Presidential Decree No. 192/2009 specified the legal form of the Authority and its location, stating that the Authority is a public legal person affiliated to the Minister of Investment. The first chapter also stated that the headquarters of the Authority will be located in the Smart Village in the Sixth of October governorate. Affiliated branches and offices will be established according to need.
In the second chapter, the Presidential Decree also specified the key objectives of the Authority and its scope of specialization, stating that it will be responsible for the supervision of non-bank financial markets and instruments, including the capital market, the Exchange, all activities related to insurance services, mortgage finance, financial leasing as well as other related activities such as factoring. The objective is to ensure market stability as well as to regulate the concerned activities in a manner which ensures further market development. The mandate of the Authority also includes ensuring transparency, advancing knowledge regarding investment in the non-bank financial services sector and protecting the rights of investors.
The Presidential Decree also outlined the scope of responsibilities concerning the Authority including the issuance of licenses to perform non-bank financial services, providing information related to this domain of activities and deploying proper regulations to ensure competition and transparency in the provision of the aforementioned services.
The Decree also specified in chapter three the rules and regulations concerning the management of the Authority and its financial system. The third chapter also specified the role and responsibilities of the Authority's Board including the responsibility to set and supervise the operating strategy and the executive policy. The Board of Directors will also be responsible for drafting all of the supervisory and inspection rules concerning the operation of the entities falling under the jurisdiction of the Authority. In addition, the Board is responsible for consultations regarding all of the laws, decrees and regulations regarding the scope of work of the Authority.
The Decree also stipulated the formation of the Board of Directors, which is to include the chairman and two deputies as well as six members with expertise in the area of non-bank financial services to be nominated by the Minister of Investment, of which one member will be the vise-governor of the Central Bank to be nominated by the Governor of the Central Bank of Egypt. The Prime Minister is to issue the decision regarding the appointment of the Board.
The Minister of Investment stated that the new legislative framework governing the operation of the Authority (Law 10/2009) as well as Presidential Decree 192/2009 have stipulated that the Board of Directors has the ultimate authority over all aspects of operation and that the decisions of the Board are final and do not need any credence from any other administrative authority of higher standing. The Minister also stressed that the Authority will have financial independence with an independent budget which is to be supervised by the Central Audit Agency in accordance to the governing laws.
The Decree also stated that the Board of Directors of the new Authority will assume the responsibilities specified for the Board of Directors of the Egyptian Insurance Supervisory Authority, the Capital Market Authority and the Mortgage Finance Authority as stated in the related laws. The Decree also stipulated that the Board meets twice each month.