Financial Regulatory Authority Issues New Regulations for Investment Funds in Minerals
The Financial Regulatory Authority (FRA) in Egypt has recently issued new regulations regarding investment funds in minerals. The FRA’s Board of Directors, led by Dr. Mohamed Farid, has been working to improve financial regulation and promote a more diversified investment landscape in Egypt. Investment funds in minerals are one of the transferred financial values that the FRA has recently authorized for investment.
The new regulations, issued as Decision No. 50 of 2023, amend the FRA’s Board of Directors’ Decision No. 71 of 2021, which established regulations for dealing with investment funds in minerals. The new regulations aim to standardize the dealing of investment funds in minerals, ensuring the safety and accuracy of transactions while promoting financial inclusion and diversifying investment and savings options for Egyptians.
The new regulations allow investment funds to deal in movable financial assets, including metals, as per Article 35 of the Capital Market Law. They also require investment managers to deal in buying and selling minerals through registered entities while adhering to the FRA’s regulations. Investment funds’ board of directors or supervisory committees can seek assistance from registered mineral preservation service providers.
Regulations for Mineral Preservation Service Providers
Resolution No. 51 of 2023 outlines the regulations for registering and deleting mineral preservation service providers in the FRA’s register. These providers must satisfy specific conditions, including legal establishment form, minimum technical and technological requirements, premises and safes conditions, internal control systems, financial audit foundations, and customer instruction storage and retrieval systems.
Mineral preservation service providers must hold separate accounts for each investment fund and submit quarterly periodic data on each fund’s assets. They must also provide separate storage for minerals for each fund and obtain insurance coverage for fire, burglary, loss and damage, breach of trust, and natural disasters from an FRA-licensed company.
Regulations for Entities Dealing with Investment Funds in Minerals
Resolution No. 52 of 2023 sets out procedures for registration and deletion in the FRA’s register of entities that investment funds deal with in the purchase and sale of minerals. These entities must take an institutional form, be licensed, have at least two years of previous experience, and be a member of the Egyptian Commodity Exchange within the category (A) trade companies. They must also have linkage systems with a pricing service for minerals approved by the FRA.
This initiative aim to ensure that investment funds in minerals deal with reputable and well-established entities, promoting transparency and accountability in the investment process. Entities that meet the FRA’s registration requirements will be included in the FRA’s register, which is publicly accessible.
Dr. Mohamed Farid’s Directives on the importance of the new regulations
Dr. Mohamed Farid, CEO of the FRA, emphasized the importance of these improvements, stating that they will help to promote a more diversified investment landscape in Egypt while ensuring the safety and accuracy of transactions. He also noted that the initiatives will contribute to the FRA’s vision of promoting financial inclusion and encouraging more Egyptians to invest in the country’s economy.
In conclusion, the FRA’s new plan for improvements for investment funds in minerals provide a framework for investment managers to deal in buying and selling minerals through registered entities while adhering to the FRA’s regulations. The regulations for mineral preservation service providers and entities dealing with investment funds in minerals aim to promote transparency and accountability in the investment process, ensuring the safety and accuracy of transactions. The FRA’s commitment to improving financial regulation and promoting a more diversified investment landscape in Egypt is an important step towards the country’s economic growth and development.