news & events
FRA’s new rules and procedures for dealing in securities
In an effort to increase the attractiveness of Egyptian assets to VCs and to secure their investments in start-ups, the Financial Regulatory Authority ("FRA”) issued Decree No. 68 for 2022 on 16 March 2022 (the “Amendment”) amending FRA’s Decree No. 94 for 2018 (the “Decree”) governing the transfer of ownership of securities not listed in the EGX.  

The Decree adds a new article number (9) setting forth the possibility for directly executing transfers of equity ownership for the benefit of VCs in terms of convertible instruments.

VCs ownership of Convertible Instruments

The Amendment adds to Misr for Central Clearing, Depository and Registry’s (“MCDR”) mandate the ability to act as an escrow agent in cases where VCs invest in start-ups through convertible instruments. MCDR acts as such with the view of ensuring the execution of the conversion and ownership transfer of such instruments on the EGX, all in accordance with the agreements entered into between the VC and the start-up’s shareholders.

The FRA is yet to issue the executive procedures for the implementation of the above.

In addition, the FRA may also exempt, through prior approval, the above security transfers from onshore payment of consideration, subject to the supervision of the Central Bank of Egypt.

Market Reaction

The Prime Minister along with the FRA, GAFI and ITIDA signed a protocol on 6 April 2022 to entice VCs to invest directly in Egypt. The protocol aims at developing and encouraging the entrepreneurial ecosystem to invest and fund Egyptian startups.

In addition, Amr Mahfouz, the CEO of ITIDA, stated that the FRA will establish facilitating regulations for the transfer of ownership of companies and entities that engage in venture capital activity by investing in establishing companies through convertible financing instruments, and will also set procedures for transferring shares ownership in establishing companies, in order to ensure the implementation of ownership transfers in the EGX.

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The New Amendments encouraging Public-Private Partnerships
September 20, 2022
The New Amendments encouraging Public-Private Partnerships

Following amendments that were introduced to the Public-Private Partnerships Law (the “PPP Law”) in December 2021, the Prime Minister issued Decree No. 3217 on 13 September 2022 (the “Amendment”) amending the Executive Regulations of the PPP Law issued by virtue of the Prime Minister Decree No. 238 of 2011 (the “ER”). The Amendment provides more […]

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EGX Granted the Power to Reverse Transactions
August 16, 2022
EGX Granted the Power to Reverse Transactions

In an effort to maintain the stability and security of transactions conducted on the Egyptian Stock Exchange (the “EGX”), the Financial Regulatory Authority (the “FRA”) has approved the EGX’s proposal to reverse transactions that may have violated trading rules. The EGX now has the power to request securities brokers to reverse transactions via requiring the […]

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