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The Egyptian Financial Supervisory Authority EFSA approved today EGX suggestion of applying the mechanism for large volume of transactions on securities listed which is known as Block Trading. The block trading will be applied starting from 18 May 2014, as EGX is keen on developing mechanisms of trading in the market and to facilitate trading for investors and to provide modern mechanisms.
These new regulations are designed to protect the market and its participants from the influence of the change in prices as a result of the huge trades that is traded in different prices from that of the market.
The Block trading is applied in several global markets in to ensure banning the influence on the market price and to ensure a disclosure of what is being implemented. It has been put controls which ensure that there will be no effect for the acquisitions, as well as the insider deals.
The block trading is intended to transactions or deals valued at more than the daily average trading volume of the security shop and not less than 1% of the voting rights, and a minimum of a million Egyptian pounds, or those processes in excess of 10 million pounds and not less It's the value of the counterparty for the amount of 50,0000 pounds.
In this context, Dr Mohammad Omran, EGX Chairman said that implementation of the new mechanism will be via special software before the start of trading session within the guidelines laid down by EGX, pointing out that it will be reviewed daily average trading volume on a regular basis every six months, with counting the fundamental events that would affect the reference quantities (As share split, bonus shares, a capital increase ...).
Dr. Omran said that the new mechanism will not affect the market prices, as well as the official standard indicators in the market, adding to the disclosure of these transactions will be disclosed in accordance with the rules in force.
Decision no. 158 (PDF Format) File Size: 580.75 KB
