Highlights

On 3 February 2026, the Financial Regulatory Authority (the “FRA”) issued decree no. 332 of 2025 (the “Decree”), establishing a comprehensive regulatory framework governing the approval of brokerage companies to receive clients’ orders for trading securities through a digital platform.

Scope of Application

The Decree applies to all licensed securities brokerage companies in Egypt that wish to obtain the FRA’s approval to receive clients’ orders for trading securities on their behalf through digital platforms and to display data and information.

The framework regulates both:

• the digital platform manager, being the Egyptian joint-stock company registered in the FRA outsourcing register (the “Digital Platform Manager”) that establishes and operates a digital business model approved by the FRA that allows encrypted transmission of clients’ trading orders to licensed brokerage companies and display of data and information relating to such securities, (the “Digital Platform”); and
• the party that remains solely responsible for regulated brokerage activities, including client onboarding, account opening, order execution, and compliance with applicable capital market and anti-money laundering regulations (the “Brokerage Company”).

The Decree further governs the approval process for Digital Platforms, the technical and cybersecurity standards applicable to their operation, and the disclosure and transparency obligations applicable to brokerage companies using such platforms.

Key Requirements:

1. Application and Approval Requirements

The Platform Manager must submit an application including:

1. platform name and purpose;
2. evidence of approval from the relevant supervisory authority to which the platform is subject, if any;
3. copy of the incorporation agreement, the articles of association and ownership structure;
4. managing director/executive officer and legal representative;
5. head office address;
6. contact details; and
7. any other documents required by the FRA.

The FRA’s approval is subject to the following requirements:

1. compliance with FRA Decree No. 139 of 2023, to the extent necessary for approval;
2. full encryption of all services from client entry to brokerage systems without unauthorised access, including preventing access by the Platform Manager and its personnel; and
3. maintaining an electronic record of technical complaints related to the use of the platform, including the outcome of their review, and submitting periodic reports to the FRA in accordance with the forms and timelines specified by the FRA.

2. Operational Requirements and Restrictions

Prohibited activities include:

1. performing any activities related to providing brokerage services to clients on behalf of Brokerage Companies;
2. providing investment recommendations or arranging, preferring, or classifying securities in a manner that may influence client decisions; and
3. using predictive models, behavioral analytics, or AI to influence clients’ investment behaviour, or advertising or promoting any Brokerage Company or its services in a biased or non-neutral manner.

Obligation of brokerage companies include:

1. obtaining prior approval before contracting with a Platform Manager registered with the FRA for the purpose of receiving clients’ trading orders and displaying related data and information through the platform;
2. be duly approved by the FRA to engage in financial technology activities in accordance with FRA No. 140 of 2023 and comply with FRA Decrees Nos. 139 and 141 of 2023;
3. independently open client accounts and execute orders, including the offering of securities and services related to receiving trading orders through the platform, without delegating any regulated activities to the platform;
4. provide effective digital communication channels between the Brokerage Company and its clients;
5. ensure encryption and secure record retention, with decryption and access to order data limited to the brokerage company, the client, and the FRA; and
6. comply with the AML Law, its Executive Regulations, and the supervisory controls issued by the FRA in this regard.

Disclosure requirements on the Digital Platform include:

1. licensing information and FRA approval under the Decree;
2. nature of services provided to clients under the platform;
3. educational materials regarding electronic trading controls, technological risks associated withusing the platform, and safeguards for login credentials and authentication methods;
4. clear and simplified disclosure of all fees, commissions, and expenses payable by the client, including the method of calculation;
5. disclosure of material digital channels, including service interruption or technical failures and the procedures for addressing them; and
6. all displayed information must be accurate and up to date.

Implications

The Decree aims to:

• establish a formal approval framework for the use of Digital Platforms in transmitting clients’ securities trading orders;
• clarify the separation of roles between Brokerage Companies and digital platform managers, preserving the brokerage firm’s full regulatory responsibility;
• limit digital platforms to a purely technical function, prohibiting advisory, promotional, or brokerage-related activities;
• strengthen cybersecurity and data protection standards, including mandatory end-to-end encryption of client orders;
• enhance transparency and investor protection through clear disclosure, risk warnings, and educational requirements; and
• ensure ongoing regulatory oversight, including complaint logging and periodic reporting to the FRA.

Conclusion

The Decree establishes a clear regulatory distinction between Brokerage Companies and Digital Platform Managers, confining Digital Platforms to a technical transmission and display function while prohibiting advisory, promotional, or brokerage-related activities.

It reinforces encryption, cybersecurity, transparency, and complaint-handling obligations, while maintaining brokerage companies’ full regulatory responsibility for client onboarding, order execution, fintech compliance, and AML obligations.

The contributors to this article are Hossam Gramon, Partner - Head of Banking and Project Finance, Nour Osama, Associate, and Karim Madian, Junior Associate.