FRA Approves the Executive Regulations for Settling Listed Companies’ Bonds of the Intra-day Trading Mechanism

Thursday, 15 September 2022


Dr. Mohamed Farid, Chairman of the Financial Regulatory Authority (FRA), approved the executive rules submitted by Misr for Central Clearing, Depository and Registry (MCDR) after coordination with The Egyptian Exchange (EGX) for the settlement of corporate bonds of the Intra-day Trading Mechanism.

In accordance with the request of the investment banks and asset managers, to stimulate the secondary market for corporate bonds at EGX.

After the formal approval, clearing and settlement process should be carried out from the same day trading (T+ 0) when the cash balance in the account allocated for this and the paper balance of the parties to the transaction are available.

Dr. Farid explained that (MCDR) will receive Intra-day trading on bonds immediately after their implementation and in the same way as receiving operations that take place on the shares allowed to be traded in the same day, taking into consideration that the settlement process for the cash differences from the operations of Selling all or part of what was purchased in the same day trading on bonds with similar controls for shares that are allowed to be traded in the same day

He stressed that the brokerage firms shall verify cash balance in the allocated account on the day of trading for trade settlement so that the full value of the purchase is deducted from the available cash balance in the case of sale.

He added that brokerage firms wishing to sell all or part of the Intra-day purchased stocks, should notify the seller custodian (who made the original sale transaction) To approve and send it so that it is allowed to reserve from the balances of what was purchased in the same session (the system of selling from purchase.

Dr. Farid explains that the decision aims to eliminate the cost of interim financing for the period between trading and settlement and thus reduce the trading cost.