CBE sets rules for credit information, rating companies

Hossam Mounir
4 Min Read

The Central Bank of Egypt (CBE) has issued new regulations for credit information and rating companies. The regulations aim to ensure the soundness and efficiency of these companies, as well as to protect the rights and interests of their clients. The companies have one year to comply with the regulations or face penalties.

According to Law No. 194 of 2020, the CBE has the authority to license, supervise, and regulate these companies. The CBE will also monitor their compliance with the relevant laws, rules, and standards. The regulations cover various aspects of the companies’ operations, such as:

  • Capital and ownership: The companies must be Egyptian joint-stock entities with a minimum issued and paid-up capital of EGP 200m. No person or entity, and their related parties, can own more than 50% of the capital or voting rights of any company, or any percentage that leads to effective control, without the CBE’s prior approval. Any person or entity that owns between 20% and 50% of the capital or voting rights must notify the CBE within 15 days of the completion of ownership. The companies must also maintain a record of shareholders holding more than 5% of the capital or voting rights and update it regularly.
  • Governance and management: The companies must have effective governance and management frameworks that ensure the integrity, independence, and professionalism of their activities. The regulations include provisions to prevent conflicts of interest and ensure compliance with competition rules and the prevention of monopolistic practices. The companies must also pay an annual regulatory fee of EGP 100,000 to the CBE in January each year.
  • Services and fees: The companies must provide accurate, reliable, and timely credit information and rating services to their clients, in accordance with the CBE’s standards and guidelines. The companies must also notify the CBE of the annual list of fees for credit reports before any increase or imposition of new fees, providing reasons for the increase and its impact.
  • Supervision and inspection: The CBE will conduct periodic on-site inspections of the companies to assess their compliance with the law and the regulations. The CBE will also take appropriate actions in case of any violations, such as imposing fines, suspending or revoking licenses, or referring the case to the competent authorities.

The regulations also stipulate the conditions and procedures for revoking the licenses of these companies, such as:

  • Serious or repeated violations of the law or the regulations
  • Failure to address the violations within the specified timeframes and conditions set by the CBE
  • Pursuing policies that harm the public economic interest, the monetary policy, or the banking system
  • Obtaining the license based on false or misleading information provided to the CBE
  • A substantial change in the data upon which the license was granted

The CBE expects that the new regulations will enhance the role of credit information and rating companies in supporting the financial sector and the national economy.

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