Egypt’s Financial Regulatory Authority Amends Egyptian Exchange Listing Regulations

The Financial Regulatory Authority (FRA) recently issued Decree no. 72/2022 amending its previous Decree no. 67/2014 with regard to stock brokerage companies and depositories that engage in margin trading on the Egyptian Exchange (EGX).  Such companies must complete a comprehensive client study before extending financing to a particular client, and the study must be updated annually. The study must include the following elements:

  1. A risk-management analysis of the transaction
  2. An assessment of the client’s ability to fulfill any obligations resulting from purchasing stocks on margin
  3. Obtaining information from the FRA-designated institutions about the amount of credit or funding that has been extended to the client.

Brokers will now have the option to temporarily list their securities on EGX prior to fulfilling the minimum shareholding and offering percentage requirements, with the FRA granting a six-month grace period. Future FRA amendments concerning stock issuances are expected this year.