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Monday, 24 June 2019

Egypt’s market regulator drafts proposed amendments to rules on clearing companies

REGULATION WATCH- Market regulator drafting changes to rules on clearing companies: The Financial Regulatory Authority’s (FRA) board of directors agreed last week to put forth proposed amendments to the law governing clearing and depository companies, according to a FRA statement (pdf). The proposed amendments include allowing companies to receive licenses from the FRA to provide clearing and depository services on futures contracts traded on a futures exchange, as well as paving the way for the Central Bank of Egypt (CBE) to set up a shareholding company to provide these services on government bonds and treasury bill issuances. The CBE, the Finance Ministry, and Misr for Central Clearing, Depository and Registry (MCDR) had said in April that they are also considering enacting changes to the rules on clearing companies.

When will we see this new shareholding company? Procedures to set up a new debt-focused central clearing and depository company are expected to be completed by the end of 3Q2019, government sources said. The Madbouly Cabinet’s economic group approved on Friday establishing the company to handle all the clearing and registry of government debt issuances, as well as collect taxes from these issuances. It will have capital of EGP 100 mn, 60% of which will be put up by the CBE, with the Finance Ministry and Misr for Central Clearing, Depository and Registry (MCDR) each contributing 20%.

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