According to the statement, the authority has already completed all necessary legislative and regulatory frameworks to launch the market
Egypt is gearing up for the establishment of a voluntary carbon market, with Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA) outlining the conditions for brokerage firms seeking approval to eventually trade carbon emission reduction certificates.
Issuing Decision No. 1732 of 2024, Farid’s announcement marks a significant step towards activating the African voluntary carbon market and is part of Egypt's broader strategy to accelerate environmental sustainability efforts and position the country as a leader in Africa's green economy.
According to the statement, the authority has already completed all necessary legislative and regulatory frameworks to launch the market.
The new directives mandate that brokerage firms meet specific criteria to qualify for future FRA approval. These include maintaining a minimum issued and paid-up capital of EGP 15 million, ensuring equity not less than the paid-up capital, and adhering to stringent technological infrastructure and data protection measures set by the FRA.
Firms are required to implement the necessary technological infrastructure and data protection and security measures as defined by the FRA, and ensure no regulatory actions have been taken against them in the six months preceding the application, except for warnings.
They must also implement electronic trading systems that facilitate the efficient trading and settlement of carbon emission reduction certificates, while maintaining careful records of trading activities.
For traders to be authorized for carbon certificate trading, they are obligated to undergo a specialized training program specified by the FRA, or commit to completing the training once scheduled.
The FRA has streamlined the preparatory process, committing to a one-week turnaround time for processing future applications, firms will be able to apply for FRA approval once they have met all conditions, explained the statement.
A lack of response within this period will be considered indicative of the firm's readiness and commitment to the regulatory standards set forth.
