Financial Authority Implements Short Selling Rules
The General Authority for Securities and Commodities Market Regulation in Egypt has issued a new regulatory framework for the mechanism of borrowing and selling securities (short selling) aimed at enhancing market liquidity and efficiency. This framework includes precise regulation of the processes, as well as requirements to ensure investor protection. It introduces a centralized lending system that links the relevant parties for tracking operations. Additionally, it sets a maximum limit of 40% on borrowed securities relative to the total tradable securities and mandates financial guarantees and transparency in transactions, while also considering shareholders' rights and market safeguards. The objective of the decision is to facilitate the secure and effective use of the short selling mechanism within an advanced system, with a one-month deadline for licensed companies to establish the necessary technological infrastructure to begin implementation.
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