As part of The Egyptian Exchange's (EGX) Board of Directors' development strategy and the implementation of target (32)—which aims to "develop an automated system to replace the manual processes for GDR transactions, establish connectivity with Misr for Central Clearing, Depository, and Registry (MCDR), brokerage firms, and custodians, and enhance the regulations governing GDR transactions"—the EGX's IT Team, in collaboration with the Operations team and MCDR, has developed a fully digital system for GDR operations. This system digitizes all current procedures to eliminate the need for email submissions of required documents to EGX and MCDR, minimize human intervention, and improve operational quality and efficiency to accommodate current and future increases in transaction volume.This initiative builds on the cumulative efforts of successive EGX administrations to enhance work systems and performance, while preserving and building upon previous achievements to establish a strong institutional work culture. Notably, EGX was the first exchange in the region to handle GDR transactions, beginning in 1996.
Ahmed El-Sheikh, Chairman of EGX, stated: “As part of EGX’s strategy to develop market trading mechanisms and upgrade the technological infrastructure of EGX's operations using the latest technologies, we have fully digitized the GDR operational system. This transformation facilitates transactions for member companies and enhances market activity, contributing to the financial inclusion agenda."
He added: "The digitization process was carried out in two phases. The first phase involved developing a fully integrated digital communication system connecting EGX with international depository bank agents and beneficial owners' agents under the new system. It also included preparing a database for issuing and canceling GDRs against Egyptian stocks, operating within the new framework.”
The first phase went live in April 2024 and delivered positive results, including improved service quality and faster performance.
Regarding the second phase, El-Sheikh explained: "This phase involved automating the issuance and cancellation of GDRs against Egyptian stocks, sending these processes electronically to MCDR, and discontinuing the paper notifications previously sent via email.”
The second phase went live in December 2024 and has led to faster and smoother transaction processing among all parties involved.
It is worth noting that this milestone reflects the collaborative efforts of EGX, MCDR, custodians, international depository bank agents, and all other stakeholders involved in GDR transactions.
