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Tuesday, 18 September 2018

FRA, EGX agree on basket of new trading regulations

**#6 REGULATION WATCH- FRA, EGX put in less sensitive circuit breakers, move to shorter cooling-off period: The new rules, agreed to yesterday by the EGX and the Financial Regulatory Authority (FRA), according to a statement picked up by El Watan, would also allow all shares to trade up or down 10% within the day’s trading session, rather than the previous 5%, before triggering a temporary 10-minute halt to trading. The cooling-off period was previously 15 minutes. Traders will also be allowed to execute in the same session T+0 and margin transactions on newly-listed securities under new regulations.

More changes on the way: Officials are also still discussing changes to how closing share prices are calculated, with a new methodology possibly coming into effect once regulations now being reviewed by the State Council come into effect.

The EGX and FRA also agreed to come up with new licenses for brokerage firms to serve as market makers, allowing them to both buy and sell securities from their own inventory at prices they have a measure of control over. The tool is one of several financial instruments and trading options that will be made available on the EGX under amendments to the Capital Markets Act that were formalized in May. Others include short-selling, futures and commodities exchanges, as well sukuk and green bonds.

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