CAIRO - 13 September 2022: Egypt’s Financial Regulatory Authority (FRA) approved Tuesday new amendments to the rules for listing and delisting securities on the Egyptian Stock Exchange (EGX), to facilitate the business environment for all activities comprising the non-banking financial sector.
The amendments included the possibility of temporarily listing the shares of Egyptian and foreign companies on the stock exchange’s lists before registering with the authority, instead of prior registration.
This is by allowing the aforementioned securities to be temporarily registered without fulfilling the minimum conditions for the percentage of shares to be offered, the number of shareholders and the percentage of free-trading shares, provided that the registration and implementation of the offering or the start of trading take place within six months from the date of registration, instead of a month.
The offering requirements in accordance with the provisions of Article 7 of the listing rules include that the number of shares to be offered shall not be less than 25% of the total shares of the company, as well as the percentage of free-traded shares not less than 10% of the total shares of the company, and 300 shareholders are a minimum number of shareholders in the main market companies, and 100 minimum shareholders for SME market shareholders.
The new amendments approved by the FRA allowed the Authority - in accordance with Article 1 bis - to extend the deadline for completing the offering procedures for companies that will be temporarily registered, as well as the companies whose shares were previously listed on the EGX prior to the implementation of the FRA’s Board of Directors Decision No. 122 of 2017 issued regarding the amendment of the rules for listing and delisting securities on the Egyptian Stock Exchange. This is in accordance with the justifications and time plan provided by these companies to the FRA, and according to what the Authority estimates according to the position of each company.
The registration of the shares of these companies shall be considered as if it had not occurred in the event that the aforementioned period expires without implementing the offering and fulfilling the conditions and requirements of the registration, instead of requiring the issuance of a decision by the Authority’s Board of Directors to extend the period for companies that were registered before the implementation of the Authority’s Chairman’s Resolution No. 122 of 2017 .
The amendments obligate the companies that were temporarily registered and did not offer to publish a disclosure report before proceeding with the procedures for amending their structure or capital, with the exception of the disclosure obligations contained in Chapters three, four and five of these rules, until these companies fulfill the requirements for listing and offering these rules and the start of trading on their shares.
While the amendments included an article defining temporary registration, in light of its creation, to clarify what is meant without ambiguity, and it is intended to register the shares of companies that do not meet the minimum percentage of shares to be offered, the number of shareholders (or holders of certificates of deposit) and the percentage of shares (or certificates of deposit) free to trade as set forth in these rules.