4 types of electronic applications used in financial technology activities

The law regulating and developing the use of financial technology in non-banking financial activities defines the procedures for establishing companies for non-bank financial activities and the types of electronic applications that regulate their mechanism of work. necessary to benefit from those activities and services.

According to Article (7), companies or entities that obtain a license or approval from the Authority, as the case may be, to practice non-banking financial activities using financial technology, must abide by the rules, controls and requirements issued by a decision of the Board of Directors of the Financial ٌ Regulatory Authority, which must include: In particular:

1 - The conditions that must be met in the organizational structure of the company and the requirements of practical experience and professional competence in those in charge of managing the activity.

2 - Standards and powers of electronic applications used in carrying out the activity.

3- The equipment, technological infrastructure, information systems, means of protection and insurance necessary to carry out the activity.

4 - Governance requirements in terms of the formation of the board of directors and its committees, the required disclosures and their timing.

5- Controls to combat money laundering and terrorist financing, taking into account the instructions issued by the Anti-Money Laundering and Terrorist Financing Unit and after coordination with the relevant authorities.

6 - Procedures and means necessary to maintain market stability and protect dealers.

Also, companies and entities wishing to engage in non-banking financial activities using financial technology may obtain a license or approval of the Authority, as the case may be, using one of the following applications:

1- Electronic applications for financial advisor programs.

2 - Electronic applications of microfinance.

3- Electronic applications for insurance.

4- Electronic applications of consumer finance.

The Authority’s board of directors may approve other electronic applications, provided that the following are available in particular:

1- The authority to perform the tasks of non-banking financial activities for which the license or approval was issued, as the case may be.

2 - Systems to protect customers' data from electronic intrusion and cyber-attacks.

3- Compliance with the controls issued by the Authority regarding the verification of digital identity and digital contracts in the conduct of non-bank financial activities and the controls against money laundering.

The Authority, by itself, or in partnership with others, or entrusting this to one of the competent authorities, establishes a regulatory laboratory for applications that allows non-banking financial activities practitioners to use financial technology, or for the parties wishing to be registered or registered in the Authority’s registry referred to in Article (6) of this law, By testing innovative financial technology applications, including business models and related mechanisms, on real clients in preparation for presenting them to clients, under the supervision and control of the Authority. The Authority may issue a temporary license to emerging companies in financial technology for a period not exceeding two years, to support innovative emerging companies in the field of financial technology in their submission of non-banking financial activities and products. The Authority’s board of directors shall specify the conditions, controls, and procedures for licensing the aforementioned companies, the rules for supervision and control over them, and the minimum amount of their issued capital of no less than two hundred and fifty thousand pounds. Start-up companies are exempted from licensing fees.

Source: Sada Al-Balad electronic newspaper, written by Samah Anwar