FRA loosens FX financing rules for NBFIs + tightens private bond offerings

The Financial Regulatory Authority (FRA) has loosened the foreign-currency financing rules it introduced last year, widening the scope of transactions that leasing and SME-finance companies can fund in foreign currency, the authority said in a statement. The amendments revisit the framework set under Decision 318/2025 to resolve several operational bottlenecks that cropped up during its first months of implementation.

Sale-leaseback gets an FX route: Leasing and SME-finance companies can now extend foreign-currency financing through sale-and-leaseback transactions. Under the new rules, this mechanism can be utilized if the proceeds are channeled directly to funding imports, purchasing assets, or settling existing foreign-currency obligations linked to the client’s business. This adds a second route alongside the existing allowance for import financing. Both require documented proof of the underlying transaction, though freezone clients remain exempt from the documentation requirement.

Cross-border factoring upgrade: International factoring transactions will no longer necessarily depend on finding a correspondent factor. For non-recourse transactions where a correspondent factor is unavailable in the destination country, factoring firms can instead rely on banks, ins. companies, venture capital firms, or foreign financiers to safeguard transaction rights. If the factor retains recourse against the seller, FX financing can proceed even without these alternative intermediaries. Meanwhile, factoring clients operating in freezones will also be treated as external parties under the framework.

More places to raise FX: Leasing, factoring, and SME-finance companies can now source foreign-currency funding from shareholders and subsidiaries or sister companies, as well as other sources approved by the FRA. Those channels join the sector’s existing funding options, which include their own resources, commercial banks, licensed local FX dealers, and approved foreign financiers. The expansion of funding sources is designed to allow NBFIs to mobilize private-to-private foreign currency liquidity to back their local credit portfolios.

IN CONTEXT- The easing lands as regulators reshape how non-bank financial institutions (NBFIs) fund their growth. In May, the CBE barred banks from extending or renewing credit facilities to non-bank lenders unless they meet its coding and credit-reporting requirements. Early last month, it also tightened banks’ exposure to corporate and securitization bonds, part of a wider push to keep bank exposure to the fast-growing NBFI sector in check.

Also from the FRA

Private bond issuers now face a firm 30-working-day subscription deadline under a Financial Regulatory Authority (FRA) decision (pdf) published late last week. Decision 136/2026 — which modifies the baseline Decision 145/2021 (pdf) — strips issuers of the power to unilaterally extend subscription windows for stalled offerings. Instead, any extension requires direct approval from the FRA, which will only grant more time if the issuer can prove the delay will not harm its credit rating.

Vouching for collateral: Advisors on securitized offerings must now certify the quality of the underlying collateral before a transaction can close. Under the updated framework, advisors are required to sign a portfolio-quality attestation verifying that the pool of assets backing the securitization is legitimate, unpledged, and clear of competing claims that could jeopardize bondholder interests. This elevates the statutory standard of care for advisors, who were previously only required under the 2021 rules to prepare the offering’s information memorandum.

Narrowing the retail carve-out: While the FRA still requires at least 10% of any private bond offering to be allocated to investors outside the primary subscriber tranche — exempt from the typical minimum ticket sizes — this carve-out is now restricted to bonds listed on the Egyptian Exchange (EGX).

IN CONTEXT- Over the past seven months, the FRA and the EGX have rolled out a series of structural reforms in our capital markets. In January, the regulator licensed the EGX to run a futures exchange, rolled out FRA-licensing requirements for index-tracking fund managers in June, launched a new system for enforcing court and arbitration rulings on unlisted securities held at Misr for Central Clearing, Depository, and Registry (MCDR), formed a joint committee with the EGX and the Tax Authority to sort out capital-market tax treatment, and carved out an auditor-rotation exception to smooth companies’ path to listing.

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