Egypt's FRA approves amendment of regulation of capital market law regarding bonds, sukuk

CAIRO - 30 November 2021: The Financial Regulatory Authority (FRA) approved Tuesday a draft amendment to some provisions of the articles regulating bonds, securitization bonds and sukuk in the executive regulations of the Capital Market Law No. 95 of 1992.

The FRA also approved the inclusion of 4 new financing tools in the capital market, including Social Bonds, Sustainable Development Bonds, Environmental Social and Governance Bonds, Gender equality and women's empowerment bonds.

FRA noted in a statement that these tools join the green bonds of companies which have entered operations in the capital market since November 2018, to keep pace with the Egyptian state's trend towards supporting the green economy with multiple financing tools in line with Egypt's Vision 2030 in accordance with international best practices.

Chairman of FRA, Mohamed Omran, said that the draft amendment adopted the application of the same provisions and principles applicable to the five types related to the areas of sustainable development, namely (social bonds - sustainability bonds - bonds related to environmental, social and governance aspects - bonds related to gender equality and women’s empowerment - green bonds) on securitization bonds and sukuk if they are directed to financing or refinancing projects related to achieving sustainable development goals or goals with a social dimension and women’s empowerment issues.

“The securitization bonds must take into account that the assigning companies’ policies are consistent with the principles of sustainable development or that they meet standards related to the sustainable development goals, or that the transferred financial rights are linked to projects whose purpose is to achieve the goals of sustainability, and this also applies to the beneficiaries of financing resulting from Issuance of instruments,” Omran added.