Back to the complete issue
Thursday, 22 October 2020

We’re getting closer to a final decision on the ownership structure of Egypt’s new futures exchange

REGULATION WATCH- We’re getting closer to a final decision on the ownership structure of the new futures exchange — and private sector involvement is still part of the plan, according to a report in Al Mal’s print edition that cites sources it says are in the know. The working group mandated with completing the regulations and guidelines governing the futures exchange has drawn up a preliminary ownership structure for the exchange that will see the EGX take a non-controlling stake, alongside domestic and foreign financial institutions and foreign exchange operators with experience in futures contracts. The door will also be open for state-owned and private Egyptian banks and Misr for Clearing, Depository, and Registry to get a slice of the exchange’s ownership, according to the sources. The report makes no mention of the Central Bank of Egypt (CBE) being among the shareholders in the exchange, although earlier reports had indicated the CBE was interested in a piece.

The distribution of the shares between the owners is still up in the air and could become clearer next week following a meeting of the Financial Regulatory Authority’s (FRA) advisory committee, the sources say. Once the details are ironed out, the committee will present the proposal to the authority’s executive board.

Background: The creation of a futures market was made possible thanks to amendments to the executive regulations of the Capital Markets Act, which were issued in July 2018, opened the door to the introduction of new financial instruments, including short-selling, futures and commodities exchanges, sukuk, and green bonds. We’ve already been getting encouraging signals from FRA boss Mohamed Omran and deputy chairman Khaled El Nashar that the regulator wants the private sector to be involved from the get-go and circumvent the need to privatize the exchange later on.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.