FRA Approves Amendments on Listing Rules and Margin Trading Mechanisms

Thursday, 15 September 2022


Financial Regulatory Authority (FRA) board approved amendments on EGX’s listing rules.  The approval comes as a continuation of efforts to facilitate the business environment for all activities that comprise the non-banking financial sector that are subject to the supervision and control of FRA.

The amendments introduced the possibility of temporary listing of securities before registering with FRA, by allowing the aforementioned securities to be listed temporarily without fulfilling the minimum requirements for the percentage of shares to be offered and the number of shareholders, provided that the registration and implementation of the offering or the commencement of trading take place within six months from the date of listing, instead of one month from the date of registering. The amendments authorized FRA to extend the deadline for completing the offering procedures for companies that will be temporarily listed, as well as companies whose shares were previously listed on EGX before FRA’s last decision came into effect. This is in accordance with the justifications and time plan provided by these companies to FRA, and according to what the authority estimates according to the position of each company.

On the other hand, FRA approved the amendments of the margin trading regulations regarding the practice of brokerage firms and custodians for the purchase of securities on margin.  Article 4 of the new decision obligates companies licensed to practice the activity to conduct a thorough study of the situation of client before granting them financing. Likewise, according to the new amendment companies are obligated to keep this study in the client’s file and update it at least once every twelve months or whenever necessary, and to provide FRA and EGX with any data or documents they request.

Dr. Mohamed Farid, Chairman of the Financial Regulatory Authority (FRA), said that FRA is working on a comprehensive amendment project of the listing rules to facilitate companies listing on EGX, stressing that EGX is a fundamental tool for growing businesses to access finance and expand which accordingly supports Egyptian economy on a macro level.

Rami El-Dokkany, Executive Chairman of The Egyptian Exchange (EGX), praised FRA’s efforts to develop and increase the efficiency of the Egyptian capital market highlighting these amendments value in supporting EGX’s efforts to attract new listings.  He added that the Margin Trading amendment is a fundamental step for the stability of transactions in the market.  He pointed out that applying these amendments helps significantly in reducing risks and protecting investors rights.