Monday, July 6, 2009

Egypt: Appointment of Board of Directors of General Authority for Financial Supervision

Date: Jun 18, 2009

Prime Minister Ahmed Nazif appointed new members of the General Authority for Financial Supervision (GAFS) board of directors as well as Adel Mounir and Khaled Serry Siam as two deputies for the chairman of GAFS Ziad Bahaa. The appointment was based on the decree No. 1711/2009 concerning the appointment of the Board of Directors.

Members of the new Board of Directors are as follows, Hesham Ramez, Vice-governor of the Central Bank, Osama Saleh, Chairman of the Mortgage Finance Authority, Abdel-Hamid Ibrahim, senior advisor to Minister of Investment for finance affairs, Maged Othman, Head of Information and Decision Support Center, Mohamed Abdel-Raof Asaad, advisor to Minister of Finance, Counselor Mohamed El-Dakroury, Member of Parliament and General Counsel to the Board of Directors of Capital Market Authority.

Mahmoud Mohieldin noted that the Prime Minister’s decree has determined the term of the Board of Directors of the General Authority for Financial Supervision for four years according to the law, where the authority will assume its duties as of 1/7/2009. He stressed that all necessary executive and administrative measures were taken in order to enabling the new authority start its work at due date.

The minister of investment stated that establishment of the new authority comes with the framework of keenness to increase effectiveness and improve efficiency of supervision over non-bank financial services to keep abreast of latest developments of these activities, realize the financial discipline and protect rights of investors. The new authority aims at ensuring stability and soundness of non-bank financial markets and issues various means, systems and rules which ensure efficiency and transparency of these markets.

It is noteworthy that law No. 10/2009 concerning organization of supervision over non-bank instruments and markets was issued with the purpose of uniting policies, rules and measures which regulate work in the field of non-bank financial sector through establishing a single authority to be named " General Authority for Financial Supervision". The mandate of the GAFS includes supervising all non-bank financial activities to develop and maximize their competitiveness to attract more local and foreign investments. The new authority will assume the responsibilities specified for the Egyptian Insurance Supervisory Authority, the Capital Market Authority and the Mortgage Finance Authority.

The new Authority will assume its competences stipulated in Law No. 10/2009 to regulate non-bank instruments and markets, particularly the following:

  • Issuance of licenses to perform non-bank financial services.
  • Inspection on all bodies which receive licenses to operate in non-bank financial markets and activities.
  • Supervision on providing information related to non-bank financial markets.
  • Deploying proper regulations to ensure competition and transparency in the provision of the non-bank services.
  • Protecting investors’ rights.
  • Adopting necessary measures to reduce fraud and manipulation in non-bank financial markets.
  • Overseeing training and improvement of efficiency of personnel in non-bank financial markets.
  • Cooperation and coordination with foreign financial supervision authorities thus developing and increasing efficiency of means and methods of supervision in non-bank financial markets and instruments domains.
  • Communication, cooperation and coordination with societies and organizations which regulate work of financial supervision authorities across the globe thus empowering the Authority to assume its competences according to the best international practices.
  • Participation in spreading the culture of investment and financial awareness especially in the area of non-bank finance domains.
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, responsible to set and supervise the operating strategy and the executive policy and that the decisions of the Board are final and do not need any credence from any other administrative authority of higher standing. The Authority was also given all legal mandates to activate rules of financial supervision and control.

Furthermore, minister of investment is scheduled to meet with the Board of Directors of the Egyptian Insurance Supervisory Authority, the Capital Market Authority and the Mortgage Finance Authority next week to appreciate their achievements during the past period, as well as their roles in the application and activation of the financial sector reform program with regard to non-bank financial activities. The new Authority's Board of Directors will attend the meeting.