Regulatory Alerts2021-01-01
Circular Letter No. 6 of 2021 Regarding Trading by Youth Aged 16 to Under 21 in Securities Listed on the Egyptian Exchange
The Financial Regulatory Authority (FRA) of Egypt issued Circular Letter No. 6 of 2021 to formally authorize youth aged 16 to under 21 to trade securities on the Egyptian Exchange using only income from their own work or funds allocated for living expenses. The directive mandates the development of a dedicated guide outlining permitted trading methods, including direct transactions, licensed portfolio management, and investment fund units, while strictly capping portfolio values at 10,000 EGP. Furthermore, it explicitly prohibits margin trading and short selling for this demographic and grants individuals aged 18 and above with legal or guardian authorization the right to independently manage their investment assets in compliance with Egyptian civil and guardianship laws.
FINANCIAL REGULATORY AUTHORITY
Circular Letter No. (6) of 2021 dated 2021/2/23
Regarding the Trading of Youth in the Age Group of 16 to Under 21 Years in Securities Listed on the Egyptian Exchange
In light of the provisions of the Egyptian Constitution issued in 2014 guaranteeing the state's protection of youth and minors, and with the Financial Regulatory Authority's commitment to promoting financial literacy, achieving financial inclusion, and ensuring access to non-banking financial services for all segments of society, particularly youth in the age group of 16 to under 21 years, thereby enhancing savings and investment culture among this group and contributing to accelerating economic development, the Authority affirms the right of youth in the aforementioned age group to trade securities on the Egyptian Exchange. This right is limited to funds derived from their own work, i.e., income earned through practicing a specific profession, trade, or industry, as well as funds received for their living expenses, bearing in mind that the average per capita share of public expenditure amounts to 12,207 EGP annually according to the report issued by the Central Agency for Public Mobilization and Statistics for the fiscal year 2019/2020. Additionally, it includes the right of those who have reached the age of 18 and have been authorized by their guardian or a court, or who receive these funds by operation of law, to manage their own assets; all of the foregoing in accordance with the legal regulations stipulated in the Civil Code and the Guardianship over Property Law.
In light of the foregoing, it is necessary to focus on the aforementioned youth group by providing appropriate services that meet their needs, and issuing a dedicated guide for this age group that specifically includes; the benefits of trading on the Exchange, whether through direct buying and selling, or forming securities portfolios through companies licensed to do so by the Authority, or trading investment fund units, all while ensuring that the portfolio size when buying and selling securities on the Egyptian Exchange does not exceed 10,000 EGP, and without permitting trading in specialized activities consisting of margin buying of securities and borrowing securities for the purpose of selling.
This Circular Letter shall be published on the Authority's website and on the screens of the Egyptian Exchange and its website.
Executed on 2021/2/23
Chairman of the Board of Directors Financial Regulatory Authority Dr. Mohamed Omran