Proposal to facilitate foreign entity registration on EGX approved by FRA

Cairo – December 11, 2023: The Financial Regulatory Authority (FRA) has agreed to adopt a proposal regarding new processes to facilitate registration for investment funds and foreign companies on the Egyptian Exchange (EGX), intending to enhance accessibility to the local market.

The new procedures are aligned with the government’s strategy to bolster foreign investment in the stock market, update the data of foreign investment institutions already engaged in the EGX, and increase trading of financial instruments and securities.

According to the FRA, international entities, including foreign companies and investment funds of diverse types, will be able to benefit from these changes.

Included in the amendments was an extension of the validity period for working with the codes of various foreign institutions to five years from the date of the client's registration with the EGX, similar to Egyptian institutions, the remainder of the validity period of the supporting document, whichever is shorter.

For investment funds, the “SWIFT” system will serve as the supporting document, conveying all essential fund data to the Egyptian Stock Exchange via the global custodian.

The EGX also submitted a proposal to the regulatory authority to reactivate dormant accounts. Dormant accounts are currently defined as those that have had no transactions (buying or selling) occur within 12 months.

The proposal seeks to extend this timeframe, benefiting both Egyptian and non-Egyptian investors.

The entity responsible for identifying, activating, and managing dormant accounts will be unified through the Egyptian Stock Exchange, streamlining the process by transferring the task from the central depository and registration companies.

This proposal underscores a commitment to facilitating investors' interactions and minimizing complications in reactivating dormant accounts, explained the FRA statement.