EGX completes all requirements of short selling mechanism

CAIRO - 4 July 2019: Chairman of the Board of Directors of the Egyptian Stock Exchange (EGX) Mohamed Farid, said that the board of directors completed all the requirements for activating the short selling mechanism.

Farid added that all the stock exchange regulations in respect of that mechanism are ready to be implemented, especially following the completion of the securities standards that can be dealt with through this mechanism.

He pointed out that the Capital Market Advisory Committee is studying some of the issues related to the mechanism in preparation for the start of the activation of the coming periods.

Meanwhile, EGX in cooperation with Misr for Central Clearing, Depository and Registry Company, completed the procedures for establishing the settlement company for activating the derivatives market at the end of this year.

Farid added that the current period is witnessing a number of modifications required to the trading systems to facilitate the activation of that product.

He pointed out that his administration also aims to hold training sessions on the new mechanism before activating the market, to speed to reap the fruits after the activation.

Moreover, EGX and Misr Company introduced amendments to the consolidated accounts system in order to facilitate the execution of buy and sell orders by simplifying the procedures for reserving and allocating securities from the consolidated accounts to the original accounts.

Farid noted that id that the situation before the amendment required the investment manager to manually book each customer from the accounts collected in case of the desire to sell, in addition to manual distribution of the proceeds of the distribution of the sale of securities to each customer on the one of the clients of the account, as well as stopping of some codes as a result of changing their identification data during the session.

He added that the previous controls have led to a slowdown in the combined accounts, which require some adjustments.

He added that the amendments included the development of three methods of allocation as a result of sale and purchase, in addition to the possibility of automated distribution of operations from the accounts collected to the beneficiary accounts with the possibility of modifying the amount of any customer, noting that the amendments also included the establishment of controls and procedures to solve the problem of blocking codes during the session radically.