Egypt’s Financial Regulatory Authority (FRA) and the World Bank have reviewed the latest reforms aimed at modernizing the country’s capital market, with discussions focusing on the planned introduction of short selling, market-making activities and broader efforts to deepen market liquidity and attract new investors.
The meeting brought together FRA Chairman Islam Azzam and a World Bank delegation as part of ongoing cooperation to strengthen Egypt’s non-banking financial sector and align capital market regulations with international best practices in support of the country’s Vision 2030 economic agenda.
During the talks, officials discussed a series of regulatory initiatives designed to improve the efficiency and competitiveness of Egypt’s capital market.
Among the most significant developments are preparations to activate short selling of borrowed securities on the Egyptian Exchange, alongside the introduction of market makers and continued development of the country’s financial derivatives market.
According to Azzam, the reforms are intended to broaden investment strategies available to market participants, increase trading activity and enhance overall market liquidity while creating a more attractive environment for domestic and international investors.
"The objective is to build a more dynamic and competitive capital market that supports sustainable investment and economic growth," he said.
The meeting also highlighted a new training program scheduled to launch next week to prepare executives of state-owned companies that have been temporarily listed on the Egyptian Exchange.
The initiative, organized through the FRA’s Financial Services Institute and the Egyptian Directors Center, is designed to strengthen corporate governance and improve companies’ readiness for the government’s ongoing privatization and public offering program.
Officials said the program aims to equip management teams with the technical and governance skills needed to ensure successful listings and attract investor confidence.
Discussions also covered several new investment instruments that the regulator is preparing to introduce.
Among them are digital trading platforms for real estate investment fund (REIT) units, allowing investors to gain exposure to income-generating property assets without directly purchasing real estate.
The initiative is expected to diversify investment portfolios, provide new financing channels for real estate developers and broaden participation in Egypt’s investment fund industry.
Azzam emphasized that maintaining the resilience of financial institutions remains a cornerstone of the regulator’s strategy.
The FRA is updating capital adequacy requirements, governance standards and financial solvency rules while requiring financing companies to implement Basel III risk-management standards to strengthen institutional stability and protect investors.
The chairman also outlined the authority’s digital transformation agenda, noting significant progress in financial technology adoption across Egypt’s non-banking financial sector.
More than 73 fintech companies were providing regulated non-banking financial services by the end of last year, while approximately 190,000 digital contracts had been issued alongside more than 345,000 electronic Know Your Customer (e-KYC) verification processes.
The regulator is now working toward full digital integration with supervised financial institutions, enabling real-time data sharing through standardized XBRL (eXtensible Business Reporting Language) reporting systems.
Artificial intelligence is expected to play an increasing role in analyzing market data, generating regulatory indicators and streamlining licensing, registration and supervisory procedures.
Azzam acknowledged that increasing public awareness of new capital market products remains one of the sector’s biggest challenges.
The FRA is coordinating with the Egyptian Exchange, Misr for Central Clearing, Depository and Registry (MCDR), and other market participants to promote financial literacy and encourage broader participation, particularly among institutional investors, retail investors and younger Egyptians under the age of 40.
Officials view expanding domestic investor participation as essential to supporting the long-term development of Egypt’s non-banking financial markets.
Members of the World Bank delegation welcomed the pace of regulatory reforms taking place in Egypt’s capital market and broader non-banking financial sector.
They praised ongoing efforts to modernize investment products and market infrastructure, describing the reforms as an important step toward improving market efficiency, attracting investment and supporting Egypt’s broader economic development objectives.
The meeting reaffirmed the World Bank’s commitment to continued cooperation with Egyptian authorities in developing capital markets, insurance and financing sectors while promoting international standards and sustainable economic growth.
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