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Sunday, 26 January 2020

FRA amends listing rules to allow wider participation in private placements

REGULATION WATCH- FRA amends listing rules to allow wider participation in private placements: High net-worth individuals and institutional investors can now invest smaller amounts in the private component of IPOs and stake sales under amendments to EGX listing regulations issued by the Financial Regulatory Authority (FRA). The changes remove a EGP 1 mn minimum stake purchase value for the former group and EGP 10 mn for the latter.

Before the changes: Institutional investors looking to participate in private placements had to purchase a minimum of 1% of the total shares on offer, the value of which had to exceed EGP 10 mn. High net-worth (HNW) individuals could also only take part with a minimum of 0.5% of the offering worth no less than EGP 1 mn. High net-worth individuals are defined by the FRA’s most recent version of the complete listing regulations (pdf) as those with at least of EGP 5 mn in investable wealth.

After the changes: Institutional and HNW investors are still required to purchase 1% and 0.5% of the total shares on offer but no longer have to meet the EGP 1 mn/EGP 10 mn minimum stake value, allowing them to take part in smaller offerings.

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