Regulatory Alerts2013-01-01
Circular No. (2) for the Year 2013
The Authority prohibits directors, employees, and second-degree relatives of brokerage and portfolio management firms from trading on margin through their employing company, even if they hold prior regulatory approval under Article 236. Such personnel may only execute margin trades through a different brokerage firm after obtaining explicit regulatory consent and mutual board of directors' approval per Article 237. This circular enforces the statutory requirement that firms must verify compliance with these conditions before processing securities transactions for directors and employees of other regulated entities.
Circular No. (2)
Issued on 18/4/2013
To:
Brokerage firms and securities portfolio formation and management companies.
The Authority confirms that directors, employees, and their relatives up to the second degree are prohibited from trading on margin through the company they belong to, even if they have obtained the Authority's approval to trade through it in accordance with Article 236 of the Regulations. However, they may trade on margin through another brokerage company after obtaining approval from the Authority, subject to the approval of the board of directors of both companies, in accordance with the requirements stipulated in Article 237 of the Regulations, which states:
"A company is prohibited from trading securities in the name and account of directors and employees of another company operating in the same fields of activity as companies subject to the provisions of this Chapter, except after verifying that these individuals comply with the conditions stipulated in the preceding article." This is Article 237.
Dr. Mohamed Maait
Deputy Chairman of the Authority
Headquarters: Smart Village, Building 5 – 84 B
Km 28, Cairo–Alexandria Desert Road
Giza Governorate, Postal Code: 12577
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg
Phone: 202 2527 0040, Fax: 202 2527 0041