The Egypt Financial Regulatory Authority issued a board decision establishing, for the first time, a regulatory framework for creating and licensing digital platforms that allow investors to subscribe to and redeem units in private equity funds, including funds permitted to conduct venture capital activity. The framework is positioned as part of the FRA’s wider push to build a comprehensive legal basis for investment via digital platforms, following earlier regulation of platforms distributing real estate investment fund units. The rules set operating requirements for licensed platforms, including onboarding investors only after verifying registration conditions and passing a platform-run knowledge test approved by the FRA after reviewing educational materials on the instrument and related risks. Platforms must provide secure digital payment and collection channels with the necessary approvals, open required accounts under the operating mechanism of the Central Depository and Registry Company, list funds only after they are licensed by the FRA, and carry out subscription and redemption based on an FRA-approved short information memorandum published on the platform that includes, among other items, the minimum subscription level required for each issuance and a summary of the feasibility study for projects. The decision also mandates permanent communication channels between funds and registered users, prompt handling of enquiries, a complaints register with quarterly reporting to the FRA, FRA approval of the platform’s IT systems and infrastructure, electronic retention of contracts and investment documents via FRA-licensed entities, and extensive pre-registration and ongoing disclosures such as fund financial statements, unit-holder meeting minutes, issuance changes, and periodic net asset value reporting based on valuations by FRA-licensed entities and registered valuers. Remote subscription must be supported through a digital subscription application with an explicit risk acknowledgement, a dedicated bank account for each issuance, electronic transfer confirmations, immediate refunds where an investor withdraws within the permitted period or where the minimum subscription is not achieved, continuous disclosure of subscription coverage progress, and notification to the central depository to register ownership and issue digital unit certificates. Obligations also apply to all “platform parties” to avoid publishing inaccurate information, with liability to compensate affected parties. To facilitate earlier exit, the decision permits a private equity fund to meet redemption requests up to the legal maximum of 20% of total issued units, financed from available liquidity or through new purchase requests structured as subscriptions or loans. Units acquired by the fund through redemption cannot be held for more than one calendar year, carry no voting or dividend rights while held, and must be sold to third parties using FRA-approved electronic forms or cancelled through a reduction in fund or issuance size within that period.

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