Ahmed El-Sheikh, Executive Chairman of The Egyptian Exchange, launched the first phase of the integrated project to improve and digitize the Global Depository Receipts (GDRs) system.
Dr. Mohamed Farid, Chairman of Financial Regulatory Authority (FRA), and Amr El-Ganainy, Deputy CEO and Managing Director of Commercial International Bank (CIB) attended the launch along with the capital market's key figures.
EGX’s Information Technology sector finished the first phase of the integrated project of digitizing the GDRs systems. The project included developing a digital platform to process transfer requests between local ordinary shares and GDRs. The platform directly connects all parties; beneficiary shareholders’ agents, local agent of depository bank, custodians, and the Central Depository and Registry Company.
El-Sheikh stated that such step comes as an implementation of Clause (32) of EGX’s Strategy issued last January, and falls under the fourth pillar of the strategy; developing trading rules.
El-Sheikh added "the new system officially commenced and replaced the current one in use which used to communicate data and documents via e-mail and has been in place since 30 years when GDRs were first introduced.”
Implementing the new system has a number of advantages, the most important of which is enabling brokerage firms to follow up on the requests submitted, eliminating the need to the manual or email delivery of documents and requests aiming at facilitating GDRs transactions to increase liquidity.
The new system is flexible and the improvable. EGX is currently coordinating with Misr for Central Clearing, Depository and Registry (MCDR) to add the following features to the system:
- Replace traditional printed GDRs transfer order with digital transfer order through the platform.
- Send approvals to MCDR via the platform instead of using printed ones.
Dr. Mohamed Farid appreciated EGX efforts and thanked the management for the kind invitation to attend “Ring=of–Bell” opening ceremony celebrating the launch of the new system.
Dr. Farid said: FRA is exerting continuous efforts to accelerate the pace of digitization of non-banking financial transactions in line with its main objectives of achieving financial inclusion in the non-banking financial system. This includes improving trading mechanisms in the stock market.
This comes in line with The Governmental efforts to increase the number of beneficiaries of non-banking financial services and to help achieve their investment, financing and insurance objectives.
He added that using financial technology facilitates customers’ access to nonbanking financial services, and increases their availability.
FRA Chairman shaded the light on some of FRA’s decisions issued to activate Law No. 5 of 2022 regarding regulating and improving usage of financial technology (FinTech) in non-banking financial activities. They are Resolution No. 139 of 2023 for technological equipment and environment, Resolution No. 140 of 2023 for digital KYC; digital identity, digital contracts, and digital records, and Resolution No. 141 of 2023 to create a registry for outsourcing service providers.
Amr El-Ganainy praised the efforts of FRA & EGX to include technological applications in securities trading mechanisms, especially what we are witnessing today of digitizing GDRs processes. Before that, we witnessed digitizing the coding processes capitalizing on FRA’s executive decisions to digitize nonbanking financial transactions related to digital identity, digital contracts, and digital records, and added: improving trading mechanisms is one of the most important pillars to increase financial, investment and insurance inclusion during the coming periods.
