In line with the state’s directives to attract foreign investors to the stock market, and to encourage trading of securities and financial instruments listed on The Egyptian Exchange (EGX), Financial Regulatory Authority (FRA) has approved EGX’s proposal to facilitate registration procedures for foreign institutional investors and to simplify procedures for activating dormant accounts.
Ahmed El-Sheikh, EGX’s Executive Chairman, stated that the purpose of these amendments is to comprehensively simplify all procedures for updating the data of foreign institutional investors that already invest in the stock market, and also to facilitate procedures for registering new ones. He added: All foreign institutions will benefit from the amendments, including companies and investment funds.
EGX’s Chairman said that the amendments include extending the validity period of working with codes of foreign institutions, to become five years from the date of the client's registration with EGX (similar to Egyptian institutions) or the remaining validity period of the documentary evidence, whichever is shorter. He added: Regarding the documentary evidence for investment funds, it will suffice to use "SWIFT" sent from the global custodian to EGX including all the required fund data to be disclosed.
Worth noting that EGX has submitted to FRA a proposal regarding reactivating dormant accounts. As per the current situation, the client’s account is considered dormant if no transaction is done (buy or sell) for a period of 12 months, while the proposal includes increasing that period to facilitate the procedures for all investors; Egyptians and non-Egyptians. EGX will be the sole responsible for identifying and reactivating dormant accounts rather than the central depository companies as is currently the case. El-Sheikh stated that this proposal aims to activate EGX’s role in facilitating procedures for all investors, and to avoid potential conflicts in identifying dormant accounts and reactivating them between the central depositories.
