Dubbed “Robo-advisors for Investment,” these digital advisors provide electronic investment advice based on risk analysis, investment objectives, and financial solvency
Artificial intelligence is making its way into Egyptian asset management firms as those looking to utilize AI-powered financial advisors can now look to the Financial Regulatory Authority’s (FRA) recently issued guideline.
Dubbed “Robo-advisors for Investment,” these digital advisors provide electronic investment advice based on risk analysis, investment objectives, and financial solvency.
Asset management firms are required to have a minimum capital of EGP 15 million to obtain a license to operate using robo-advisors, as well as to submit quarterly reports detailing its performance.
Other conditions include submitting approved evidence regarding work policies, adoption of policies for algorithm design and selection, and continuous review, development, and updating of algorithms.
“The automated financial investment advisor creates and manages the investment portfolio consisting of securities and financial instruments listed on the stock exchange’s tables, and their performance is monitored and evaluated periodically,” the FRA explained.
The FRA stressed that firms are obligated to be fully committed to ensuring their cybersecurity efforts are capable against any risks.
The regulations will be implemented under Law No. 5 of 2022 regarding the use of financial technology in non-banking financial activities.
