FRA requires non-bank financial institutions to update customer identification, verification forms

Islam Azzam, Chairperson of the Financial Regulatory Authority (FRA), has issued a circular requiring non-bank financial institutions to update their customer identification and identity verification forms in line with the revised version of the Due Diligence Procedures for Customers of Financial Institutions Subject to the FRA’s Supervision, issued by the Anti-Money Laundering and Terrorist Financing Unit last September.

The circular requires institutions to take into account customers belonging to groups requiring special care, particularly persons with disabilities, illiterate individuals and the elderly, when preparing the updated forms for identifying customers and beneficial owners and verifying their identities. The aim is to ensure that the forms are accessible and easy to use for these groups, which require particular attention.

The measure reflects the FRA’s commitment to ensuring that institutions under its supervision across all non-bank financial activities update their policy and procedure manuals and internal control systems.

Circular No. 8 of 2026 stipulates that all institutions must comply with the updated Due Diligence Procedures and make the necessary amendments to the forms customers use to apply for services and products. They must also update their policy and procedure manuals and internal control systems.

Once approved, the revised versions must be submitted alongside the annual periodic report on each institution’s anti-money laundering and terrorist financing activities for 2026, no later than 31 January 2027.

Azzam explained that the new circular aims to accelerate the implementation of the latest requirements governing the anti-money laundering and terrorist financing framework, facilitate transactions, ensure that applicable rules cover all customer categories, verify the reliability of data and strengthen institutions’ internal systems.

The FRA Chairperson reaffirmed his commitment to enhancing the efficiency and effectiveness of anti-money laundering and terrorist financing controls across non-bank financial activities.

He also referred to Circular No. 5 of 2026, issued last September, which required all institutions operating in the capital market, insurance and non-bank financing sectors to comply with the updated Due Diligence Procedures.

He noted that this requirement was linked to the FRA’s recent decisions to develop the digital framework for verifying customer data and identities in the consumer finance and medium, small and micro-enterprise financing activities.

For his part, Hamdy Badawy, Assistant to the FRA Chairperson, stressed the need to develop regulatory, governance and risk management frameworks within companies and ensure that the Due Diligence Procedures are widely circulated so that all relevant employees are familiar with them.

He also emphasised the importance of aligning internal policies with national anti-money laundering and terrorist financing requirements.

Last month, the FRA hosted an expanded meeting bringing together members of the Research and Strategic Analysis Department at the Anti-Money Laundering and Terrorist Financing Unit and representatives of institutions under its supervision, including board chairpersons, chief executive officers and anti-money laundering officers.

The meeting aimed to strengthen efforts to combat money laundering risks and ensure their early detection.