Regulatory Alerts2015-01-01
Decision of the Board of Directors of the Authority No. (63) of 2015
The Egyptian Financial Supervisory Authority issued Decision No. (63) of 2015 to amend the financial solvency standards applicable to licensed market maker companies. The amendment replaces the regulatory calculation for settlement transactions by requiring that purchased or sold securities under settlement be weighted at 100% and valued daily at 90% of their market closing price. Additionally, it formally codifies the obligation for market makers to continuously maintain a net liquid capital reserve of no less than 10% of their total weighted liabilities.
Chairman of the Board
Decision of the Board of Directors of the Authority No. (63) of 2015
Dated 31/5/2015
Amending Decision of the Board of Directors of the Authority No. (37) of 2014
Regarding the Financial Solvency Standards for Companies Licensed to Conduct Market Maker Activities
Board of Directors of the Egyptian Financial Supervisory Authority
After reviewing the Capital Market Law issued by Law No. (95) of 1992 and its executive regulations and decisions issued to implement them;
and the Central Depository and Registration of Securities Law issued by Law No. (93) of 2000 and its executive regulations;
and Law No. (10) of 2009 regarding the regulation of supervision over markets and non-banking financial instruments;
and Presidential Decree No. (191) of 2009 on the provisions organizing the Egyptian Exchange and its financial affairs;
and Presidential Decree No. (192) of 2009 issuing the Basic Statute of the Egyptian Financial Supervisory Authority;
and Investment Minister Decision No. (293) of 2007 adding the market maker activity to the activities of companies operating in the securities sector;
and Chairman of the General Authority for Capital Market Decision No. (14) of 2007, and its amendments;
and Decision of the Board of Directors of the Authority No. (37) of 2014 regarding the financial solvency standards for companies licensed to conduct market maker activities;
and upon the approval of the Authority's Board of Directors in its meeting held on 31/5/2015;
Has Decided
Article One
The text of the item "Settlement Transactions" Clearing Result" stipulated in Article One of Decision of the Board of Directors of the Authority No. (37) of 2014, and Article Two of the same Decision, is replaced with the following texts:
- "Settlement Transactions" Current Assets item included in the "Assets" item in Appendix (A) attached to the Chairman of the Authority Decision No. (14) of 2007:
The value of selling securities or index fund documents purchased from the market maker that are still under settlement shall be added with a weighting factor of 100%, and the value of purchasing securities or documents still under settlement shall be deducted with a weighting factor of 100%, and they shall be valued daily throughout the settlement period at 90% of their market value according to the closing price of each.
Article Two of Decision of the Board of Directors of the Authority No. (37) of 2014:
"Taking into account the rules for calculating net liquid capital specified in Chairman of the Authority Decision No. (14) of 2007 and its amendments, the company licensed for the market maker activity is obliged to maintain at all times a net liquid capital of not less than 10% of its total weighted liabilities."
Article Three
This Decision shall take effect from the day following its publication date, and the concerned authorities are tasked with implementing it according to their respective jurisdictions.
Chairman of the Board
Sherif Samy
(Seal of the Egyptian Financial Supervisory Authority - Chairman's Office)
47076
Egyptian Financial Supervisory Authority
Egyptian Financial Supervisory Authority
Address: 20 Emad El-Din St. - Cairo - Egypt
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg
Postal Code: 11111
Email: info@efsa.gov.eg
Telephone: (+202) 27727133
Fax: (+202) 25741000