Cabinet approves market share cap for brokerage mergers
Cabinet approves market share cap for brokerage mergers: The acquisition a stake greater than 33% of any brokerage with a market share of 10% or more will require approval from the board of the Egyptian Financial Supervisory Authority under amendments to the executive regulations of the Capital Markets Law. Cabinet signed-off on the regulatory change at its meeting last week, Al Borsa reports. The move, which the Council of State (Maglis El Dowla) reviewed back in May, was previously positioned as a bid to “protect minority shareholder rights.” The new rules also give existing shareholders first right of refusal to subscribe to a new capital increase and give heirs up to two years to acquire EFSA sign-off on the inheritance of a one-third interest in any brokerage. The regulatory changes were proposed during Beltone Financial’s failed bid to acquire CI Capital from CIB at a cost of nearly EGP 1 bn; CI Capital had an 11.1% market share in September against Beltone’s 6.2%.
Meanwhile: “The new Investment Law” will be a top legislative priority for cabinet during the current session of the House of Representatives, said Prime Minister Sherif Ismail. The measures, which past statements by Investment Minister Dalia Khorshid suggest include bringing back tax breaks and free zones, will be reviewed during cabinet’s next meeting, said Ismail. The statement, which ran in Al Shorouk, does not clarify whether this means a whole new law or amendments to the existing act, a question on which the Investment Ministry had sought the input of investors in a poll which closed earlier this month. Poll results have not yet been released.