Within the framework of implementing the comprehensive strategy for developing non-banking financial services sector (2018-2022), especially in “ its sixth axis on developing governance levels, strengthening regulatory capacities and protecting investors’ rights”,
FRA’s Chairman revealed that FRA has issued the first detailed Investor Protection Guide on dealing in Capital market, insurance, private insurance funds and multiple financing activities in Egypt.
FRA’s Chairman emphasized that after approving the issuance of “Investors Protection Guide” by decision no. 446 of 2019, companies and entities operating in non-banking financial activities shall comply with the principles set in the Guide. Also, all necessary measures shall be taken to publish the Guide and inform clients’ of their rights and obligations. The Guide shall be published on the home page of company’s websites and on their social networking platforms. In addition, companies shall clearly inform its clients on how to obtain and review Investor Protection Guide issued by the Authority in any document that includes the provision of financial service. Moreover, companies shall provide its clients with a printed copy of an explanatory note on Investor Protection Guide prepared by the Authority upon offering any financial , insurance or financing product under FRA’s supervision. An information poster of the most important principles stated in the Guide shall be set in the company and its branches and all other places that provide services to the clients.
He added that Investor Protection Guide represents a message of awareness and notifying the prospective clients of the basic protection principles which will be implemented in an intensive communication program aimed at reaching citizens through mass media, print and digital media at the beginning of next week to introduce these principles. The said principles include transparency, fair treatment, risk reduction, dispute resolution, complaints resolution and strengthening trust - in all details of each non-banking financial activity. The Guide also includes company’s obligations prior to contracting or benefiting from the service. On the top of these obligations are : honesty upon providing information , access to all information provided to the client, ensure that they understand them clearly, understand how to use financial product or service accurately and correctly. Besides, giving advice on not to buy any financial products or services that are not appropriate to their financial situation ,as well as their right to obtain copies of contracts and documents after signing them and keeping them in a safe place.
He emphasized that many economies rush towards providing and facilitating access to financial products and services in a timely manner and at an affordable cost to all segments of society , through using new technology in an active and accelerated manner , taking from the "financial inclusion" a headline ". Accordingly, regulatory bodies like – the Financial Regulatory Authority (FRA) takes the responsibility of protecting investors and spreading financial awareness for such categories. the Regulatory bodies become directly responsible of enhancing the credibility and trust in the non-banking financial sector activities. Besides, reducing any damage to clients’ interests as a result of the lack of sufficient and clear disclosure of the most important evidence and procedures, unfair transactions or risks of safety and confidentiality of data , in addition to digital fake offers that may subject to "doubt and anonymous.
FRA’s Chairman added that challenges facing regulatory bodies worldwide reached its peak after it was proved that more than 60% of the world's population used financial technology in their transactions in 2016 - according to the Global System for Mobile Communication. He noted that this action increased opportunities for integrating poor and marginalized, moving from the informal financial system to the formal financial system, allowing access to innovative types of financial products and services in a faster and more secure way available for all inpiduals.
FRA’s Chairman noted that investor protection file has become a "global trend" of great importance within the policies of different countries, in the light of the complexity of financial decisions in the financial markets, which currently characterized by complex financial products, where it is not easy for a large proportion of inpiduals to recognize its risks. In this respect, one of the priorities of FRA’s strategy for the next four years was to urgently seek to develop principles of investor protection within the framework of a balanced relationship that provides protection to investors in the capital markets, insurance, private insurance funds and financing activities of various types, providing fair treatment for all clients and enhancing transparency and trust in all financial transactions provided by institutions under FRA’s supervision.
He stressed that the first detailed Investor Protection Guide in the Egyptian market is consistent with best practices in many countries, international best practices and standards set for investors’ protection by international financial institutions such as OECD, UNCTAD and EU and the World Bank Report 2017 on Good practices for financial consumer protection.
He noted that investor protection is essential to ensure that they obtain the needed information to take informed decisions. Also, information must be clear and simple so that investors can understand it. On the other hand, financial service providers shall treat clients fairly and avoid any misguided practices. Financial service providers shall have responsible and professional conduct before, during and after providing financial services. They must be qualified and have the necessary qualifications and certificates to enable them to perform their role efficiently and distinctly.
FRA’s Chairman also stressed that clients have the right to resort to mechanisms - guaranteed by legislations regulating non-banking financial markets - to grieve and complain to resolve disputes arising from service providers. That is besides, other mechanisms to protect the privacy and confidentiality of personal information, as well as ways to ensure clients’ protection in cases of Bankruptcy of Financial Service Providers.
It should be noted that the set of principles included in this Guide is complementary and not an alternative to FRA’s decisions and rules related to investor protection. Financial institutions should take the necessary measures to implement the principles and controls in this Guide. If any of the stated principles contradicts the laws, the laws prevail.