EGX Issued A Decision To Start Working With The Regulations For ETFs And Market Maker

The Egyptian Exchange (EGX) issued an executive decision to start applying the regulations for both ETFs and market maker activity.  The new regulations for market maker stressed on its providing an endorsement stating separation between the activities of market-making and brokerage activity.  It also defined the technical infrastructure for information systems that should be applied by the market maker to connect with EGX.  The regulations also required a market maker to take all measures to ensure liquidity on documents in circulation.  New restrictions has been put for borrowed stocks of the index or certificates in accordance with the clearing system and settlement certificates of index funds prepared.
 
On the other hand the new regulations of ETFs should not be less than the securities comprising the portfolio of the fund for 95% of the securities comprising the index taking care not to make harmful effects on the holders of Fund's.  The new rules also commits company managements to the Fund index shall submit to EGX (in real time during trading) value indicative of the certificates and the disclosure of all the dealers in the market on its Web site periodically and regularly during the trading session.  It also committes management services to disclose the size of the fund and net redemptions and new releases and the number of existing documents as well as the statement of the securities that comprise the fund's portfolio. It is worth mentioning that the mechanism of trading documents is the same mechanism in place when trading on the stock are also subject to the same price limits applied to the components of the index.
 
Dr. Mohammed Omran, Chairman of EGX, said that the market has been waiting for a long time start having new mechanisms such as a market maker and ETFs, which represents good hedging tool for all dealers, especially dealers individuals and a new option adds as it provides the Egyptian capital market of options for managers to invest in various financial institutions.