Egypt’s FRA opens door for companies to obtain licence for credit rating of securities

Egypt’s FRA opens door for companies to obtain licence for credit rating of securities

Egypt - The Financial Regulatory Authority (FRA) issued resolution No. 151 for 2023 regarding criteria for obtaining a licence for credit rating of securities.

The decision, issued on 22 August, provides those interested a period of three months from the date of publication to submit their applications to the Authority. The deadline may be extended after the submitted applications are examined.

The decision sets 5 criteria for obtaining a licence for credit rating of securities:

First criterion: Technical requirements which consists of three parts. First, a certificate from an international credit rating agency that says the company will adhere to a business model similar to its business model, and it is preferable that the certificate be from a major agency. If not, the application shall be accompanied by evidence of the existence of a technical partner who has a licence from internationally accredited bodies in the same business. Second, a draft of the credit rating methodologies to be followed. Third, a report of technical and administrative cadres who will carry out the credit rating activities and their competencies and experiences.

Second criterion: Ownership structure which includes the shareholding percentages of Egyptian and foreign financial institutions and the shareholding percentages of international agencies specialized in