EGYPT: EFSA approves rules and criteria for stocks eligible for Egypt Margin Trading, Short Selling and Intra-day Trading

Monday December 12 2011

The Egyptian Financial Supervisory Authority has announced that it has approved the rules and criteria for the stocks eligible to Egypt  Margin Trading, Short Selling and Intra-day Trading in accordance with Article 293 of the Executive Regulation of Capital Market Law no. 95 of 1992 as follows:

1- The issuer shall publish its financial statements for one fiscal year at least, if not listed at the Egyptian Exchange according to articles 11 &11 bis (a) of listing rules at the Egyptian Exchange.

2- Within studying period, market capitalization of free-float shall not be less than 2/10000 (two in ten thousand) from the total of free-float market capitalization.

3- Within study period, trading days on shares shall not be less than 95% from the total of trading days.

4- Within study period, number of brokerage companies trading on this listed company shall not be less than 65% from the total number of brokerage companies in the market.

5- Within study period, the daily average of those who trade on the share shall not be less than 30 dealers daily.

6- Within study period, turnover rate of free-float shall not be less than 40%.

7- The impact of special deals shall be excluded upon considering these criteria . Sectoral allocation of the listed companies should be considered.

The Egyptian Exchange may exclude shares of the companies which meet the pervious criteria in cases of joint ownership of 30% or more from shares of the companies which meet the said items, or if the issuer did not abide by disclosure rules and procedures.

The Egyptian Exchange shall review – annually- the list of the companies which shares are tradable according to the mechanisms mentioned above. In addition, the Exchange shall announce the companies to be excluded a month prior to the exclusion date.

The Egyptian Exchange shall notify EFSA of the list of companies which shares are tradable according to the mechanisms mentioned above, as well as any exclusion or addition occurred in this list.The Egyptian Exchange shall announce the criteria approved by EFSA on trading screens and it shall be published on its website.

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