Board of Directors Secretariat

Decision No. (74) of 2015 of the Authority's Board of Directors

Dated 31/5/2015
Regarding the Mechanism for Trading Securities on the Day Following Purchase

Board of Directors of the Egyptian Financial Supervisory Authority

Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and the decisions issued to implement it; and the Central Depository and Registration Law issued by Law No. (93) of 2000 and its Executive Regulation; and Law No. (10) of 2009 regulating supervision over non-banking financial markets and instruments; and Presidential Decree No. (192) of 2009 approving the Basic Statute of the Egyptian Financial Supervisory Authority; and Presidential Decree No. (191) of 2009 governing the management of the Egyptian Exchange and its financial affairs; and Decision No. (67) of 2012 of the Authority's Board of Directors regarding the mechanism for trading shares on the same day (Intra Day Trading) and its amendments; and the approval of the Authority's Board of Directors in its session held on 31/5/2015;

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Has Decided

(Article One)

Trading for the sale of shares and documents of complex index funds on the Egyptian Exchange is permitted on the day following their purchase (T+1), either for the entire amount or a portion thereof, in accordance with the rules set forth in this Decision, without prejudice to the clearing and settlement processes for related trading transactions under other operational methods on the standard settlement date.

(Article Two)

The Egyptian Exchange and the Central Depository and Registration Company shall prepare and equip the automated systems and technical requirements for implementing this mechanism.

The Egyptian Exchange and the Central Depository and Registration Company shall utilize an automated link between the trading system and the central depository system to reserve the quantities required for sale, such that no securities under this mechanism are permitted to be listed unless it is confirmed that the required quantities for sale have been reserved from the pending settlement balance.

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(Article Three)

Trading under this mechanism is restricted to the following securities brokerage firms:

1. Firms that have obtained the Authority's approval to operate the same-day share trading mechanism.
2. Firms that have not obtained the Authority's approval to operate the same-day share trading mechanism, limited to the firm's balance in its account designated for the next-day sale mechanism at the Clearing Bank.

(Article Four)

Sales under this mechanism may only be executed through the same brokerage firm through which the purchase was made.
Brokerage firms shall not execute any orders under this mechanism except based on client orders.

(Article Five)

The Central Depository and Registration Company shall settle financial positions between participants in this mechanism by crediting or debiting the brokerage firm's account at the Clearing Bank.

(Article Six)

The Egyptian Exchange and the Central Depository and Registration Company for Securities shall charge fees for services provided under this mechanism, not exceeding the fees collected for same-day trading transactions (T+0).

(Article Seven)

The Egyptian Exchange shall establish a monitoring system for trading operations under this mechanism, intervene immediately to cancel non-compliant transactions, and notify the Authority at the end of the trading session of all transactions cancelled under this mechanism, along with the reasons for cancellation.

(Article Eight)

The Authority may suspend a brokerage firm's trading under this mechanism for a specified period to protect market stability or the interests of participants, in light of the provisions of the Capital Market Law, its Executive Regulation, and the decisions issued to implement them.

(Article Nine)

This Decision shall be published in the Egyptian Gazette, and on the websites of the Authority, the Egyptian Exchange, and the Central Depository and Registration Company for Securities, and shall take effect as of June 11, 2015.

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Chairman of the Board of Directors
Sherif Samy

Egyptian Financial Supervisory Authority
Egyptian Financial Supervisory Authority