Small-cap listed firms in Egypt now allowed to call off sponsorship after one year
REGULATION WATCH- Nilex-listed SMEs are now allowed to terminate contracts with their sponsors after one year, provided they achieve the goals of sponsorship, according to new tweaks by the EGX (pdf) to the recently introduced program. Small-cap firms were recently required by the Financial Regulatory Authority (FRA) to contract with sponsors when they list their shares on the Nilex. The move aims to provide expertise and support to small firms to allow them to eventually upgrade to the main market.
What are sponsors? They are financial advisors that assess the suitability of SMEs for listing on the exchange and assist qualifying firms in both going public and meeting their responsibilities after listing. They’re the equivalent of nominated advisers (‘Nomad’) used in the UK’s small-cap market. The list of certified sponsors has also been amended, with the EGX removing 10 financial advisors who have not met its requirements, and adding two others (details in the pdf linked above).