On August 9, 2023, the Financial Regulatory Authority (the "FRA") issued Decree No. 165 of 2023 ("Amendment No. 1"), amending FRA Decree No. 9 of 2021 regarding the conditions, controls and procedures for licensing the practice of clearing and settlement operations for contracts that are traded on Futures Exchanges ("Decree No. 1").
As per Amendment No. 1, the condition regarding the purpose of the company wishing to engage in the practice of clearing and settlement operations for contracts that are traded on Futures Exchanges is expanded to include the clearing and settlement of futures contracts that are traded on Futures Exchanges and other financial instruments traded on the Egyptian Stock Exchange as approved by the FRA, instead of the purpose of the company being limited to the practice of clearing and settlement operations for futures contracts that are traded on Futures Exchanges as per Decree No. 1.
In addition, on August 9, 2023, the FRA also issued Decree No. 166 of 2023 ("Amendment No. 2"), amending FRA Decree No. 49 of 2019 regarding the requirements and conditions for licensing the practice of brokerage activity in future contracts derived from securities and financial instruments listed on one of the Stock Exchanges ("Decree No. 2").
Amendment No. 2 requires the paid-up capital of brokerage companies in futures contracts to be no less than EGP 20,000,000 (twenty million Egyptian Pounds) or its equivalent in a foreign currency, effectively replacing the requirement for the issued and paid-up capital to be no less than EGP 10,000,000 (ten million Egyptian Pounds) or its equivalent in a foreign currency, as required by virtue of Decree No. 2. Furthermore, Amendment No. 2 requires that the brokerage company's equity rights be no less than the paid-up capital of the brokerage company.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.