Madbouly signs off on expanding coverage of stock exchange protection fund, slashing membership fees
REGULATION WATCH- Madbouly signs off on expanding coverage of stock exchange protection fund, slashing membership fees: Prime Minister Moustafa Madbouly has approved a proposal from the Financial Regulatory Authority to expand the coverage of the Egyptian Investor Protection Fund (EIPF) and reduce regulatory fees charged to its members by 50%, the Financial Regulatory Authority (FRA) said in a statement. The EIPF will now insure shareholders against listed companies going bust by paying out a maximum of EGP 500k per client, and its members will pay a membership fee equivalent to 0.01% for each stock market transaction, down from 0.02%.
Those listed companies are now members of the fund alongside brokerages, custodians, and fund managers. The decision would require amendments to the fund’s bylaws.
Background: El Nashar told us last year that amendments that would make it mandatory for all listed companies to make annual payments to the EIPF had made their way to cabinet. The amendments also looked to expand the fund’s coverage to stock market losses resulting from fraud.
Clarified on 13 October 2019
A previous version of this article refered to the reduced fees as “regulatory fees on stock trading” instead of regulatory fees charged exclusively to members of the EIPF.