Summary

On 18 September 2025, the Financial Regulatory Authority (“FRA”) issued Decree No. 194 of 2025 establishing comprehensive regulations for digital investment platforms that facilitate investment in private equity and venture capital funds (the “Decree”). The Decree, which entered into force on 19 September 2025, introduces clear licensing, operational, and disclosure requirements for entities seeking to digitise fund subscription, redemption, and investor relations activities in Egypt’s alternative investment sector.

Scope of Application

The Decree applies to digital platforms that enable investors to subscribe to, redeem, or manage investments in units of private equity and venture capital funds licensed by the FRA. Only licensed firms operating under the Capital Markets Law No. 95 of 1992 (the “Capital Markets Law”), and FinTech Law No. 5 of 2022 (the “FinTech Law”) are eligible to apply for platform authorisation.

Key Highlights

1. Licensing and Oversight

• Only FRA-licensed promotion and underwriting companies may establish and manage digital investment platforms.
• The FRA retains supervisory authority over licensing, technology infrastructure, and investor-protection compliance.

2. Platform Participants

• The ecosystem includes the platform manager, private equity fund, investment manager, central depository, custodian, and administrative services provider.
• All participants must hold valid FRA approvals relevant to their respective functions.

3. Eligible Investors

• Participation is restricted to qualified investors who demonstrate adequate investment knowledge through an FRA-approved knowledge test.
• Investors must also meet the financial solvency thresholds defined in the fund’s Brief Information Memorandum.

4. Technological and Legal Requirements

• Platforms must comply with the Capital Markets Law, the FinTech Law, and prior FRA decrees with regards to:
  • technological infrastructure, and protection for the use of fintech (Decree No. 139 of 2023);
  • digital identity, contracts, and records (Decree No. 140 of 2023); and
  • outsourcing in fintech activities (Decree No. 141 of 2023).
• All documentation must bear a valid electronic signature, in accordance with the E-Signature Law No. 15 of 2004.

5. Platform Obligations

• Verify investor eligibility prior to registration.
• Maintain secure and automated links among all platform participants.
• Use approved, digital payment gateways for subscriptions and redemptions.
• Provide educational materials on available investment instruments, and risk disclosures to investors.
• Submit quarterly reports to the FRA regarding complaints, and resolutions.
• Obtain FRA approval for all programs, electronic systems and data infrastructure.

6. Disclosure and Transparency

Platforms must ensure continuous investor transparency, including through the publication of, inter alia:

• conditions for registration and dispute resolution procedures;
• operational risks and means of mitigation, particularly in the event of platform malfunction;
• a Brief Information Memorandum, duly approved by the FRA;
• fund data, subscription and redemption terms, and valuation methodology;
• economic feasibility study of targeted projects, prepared by the investment manager;
• the disposal of investments and their market value;
• periodic and annual approved financial statements, and any dividend distributions;
• details of key investment events, insurance coverage, and any legal or regulatory actions; and
• semi-annual valuation and feasibility reports.

7. Subscription and Redemption Process

• Digital subscription applications must be executed via electronically signed forms.
• Proceeds must be deposited into bank accounts designated for the receipt of subscriptions, and subject to the supervision of the Central Bank of Egypt.
• Detailed electronic notifications shall be sent to subscribers regarding the successful transfer of the subscription value.
• Refunds must be issued promptly to investors seeking withdrawal from the subscription, or upon closure of the subscription period, if the minimum subscription threshold is not fulfilled.
• Subscribers shall each be provided with a digital investment document upon the issuance thereof.
• Redemption of securities may be financed through available liquidity, inviting subscribtions to new securities, or borrowing, subject to certain conditions.

The contributors to this article are Ibrahim ElGengehy, Partner, Ibrahim El Messery, Counsel, and Zeina Jowett, Associate.