CAIRO - 20 October 2023: “There is currently a study on trading real estate assets as assets rather than securities,” Deputy Chairman of the Financial Regulatory Authority (FRA) , Islam Azzam, stated.
He added that the authority has set rules focusing on buildings and administrative projects that generate income.
Azzam mentioned the possibility of listing commercial malls on the stock exchange, with a part of their shares offered to citizens for selling units per square meter. Upon completing sales through the stock exchange, the real estate registry will be notified for property transfer. This is a system of trading in assets, unlike investment funds.
In his opening speech at Habi’s newspaper fifth annual conference "Investments in Potential Energies," held on Wednesday, he noted that the authority has a strategy to increase reliance on financial technology services following the issuance of Law No. 5 for the year 2022. He emphasized that most financial transactions are now conducted through mobile phones.
The Deputy Chairman of the FRA pointed out several decisions issued in 2023, including 139, 140, and 141 for insurance against cyber risks. The authority will collaborate with various entities to gather information about loan applicants or real estate financing services and leasing through electronic applications on mobile phones. This will reveal all their transactions in financial and non-financial activities, assisting companies in making loan decisions for customers, especially those without bank accounts.
He highlighted the coordination between the authority and the stock exchange in developing a system for trading derivatives. There is ongoing work to introduce an index for insurance against price volatility.
The stock market has witnessed many developments, including the establishment of the carbon market. The exchange has finalized the rules for trading carbon emission reduction certificates. This market will allow companies involved in reducing carbon emissions to issue certificates even if they are not listed on the stock exchange. They can resell these certificates on the stock exchange, providing additional financing.
He mentioned that the authority has issued regulations to verify companies' commitment to environmental standards within the market. Foreign and local companies can conduct verification through the National Accreditation Council to reduce verification costs, encouraging companies to join the carbon market.
In the long term, non-compliant companies from the European Union and the United States will be prohibited from exporting to their markets. Companies exceeding pollution limits will have to purchase carbon certificates to export to Europe.
The authority has shown interest in sustainable development, issuing several resolutions, including No. 107 and 108 for the year 2022. These require companies listed on the stock exchange, those operating in non-banking financial activities, including insurance or the financial market, as well as micro-enterprises and leasing companies, to issue environmental and climate reports alongside their annual financial reports.
Azzam revealed that about 93 percent of companies in these sectors comply with environmental reporting. Companies now disclose environmental commitment standards. He noted that investment funds will later reject investment in companies listed on the stock exchange or engaged in non-banking financial activities unless they comply with environmental standards and disclosure processes.
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