Circular No. 2

Dated July 18, 2009

To: Companies operating in the field of securities brokerage

The amounts deposited by brokerage companies approved to allow their clients to trade within the same session, under the system known as Intra Day Trading, represent frozen and allocated funds for the settlement of financial market obligations arising from those trades, processed instantaneously via additions and deductions from the dedicated account held at the Clearing Bank. In the event that the allocated amount for settlement is insufficient, the company must cover the shortfall before the start of the next trading session to comply with the requirements for operating under this system, given the special nature of these frozen and allocated funds intended to permit the brokerage company to operate under the intra-day trading system.

Therefore, the Authority emphasizes that these amounts are not free or liquid funds that the company can use to meet its other obligations, and therefore, the security amounts allocated for settling intra-day trading transactions must be weighted by a factor less than one when calculating the financial solvency of the brokerage company.

Hisham Ibrahim
Sector Supervisor
Head of Authority Affairs

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Egyptian Financial Supervisory Authority (EFSB)