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Monday, 13 August 2018

First futures exchange could launch by year’s end

Egypt’s first futures exchange could be launched before the end of the year, Financial Regulatory Authority (FRA) Vice Chairman Khaled El Nashar tells Al Mal. Trading at first will be limited to listed securities, El Nashar said, without elaborating. The FRA is also considering introducing regulations for licensing brokerage firms as market makers, which would allow them to both buy and sell securities from their own inventory at prices which they have a measure of control over. The introduction of new financial instruments, which was made possible by the new Capital Markets Act and its executive regulations, means to boost the EGX’s trading volumes, according to El Nashar.

Background: The Capital Markets Act includes provisions on the establishment of futures and commodities exchanges, as well as the introduction of sukuk, green bonds, and margin trading. We had heard earlier this month that the EGX and Oil Ministries were meeting to decide on the framework for a natural gas exchange. We had also heard in May that Financial Regulatory Authority boss Mohamed Omran had tasked a committee with drafting the rules and regulations that would govern futures exchanges, which are part of a four-year strategy to develop Egypt’s non-banking financial sector. New regulations to govern short-selling are also in the works and expected to be complete by 3Q2018.

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