15th of March, 2014
Trading in Foreign Securities by Egyptian Licensed Brokers & Portfolio Managers
Keywords: Infrastructure & Projects, Financial Institutions, Banking & Finance
Trading in foreign securities by Egyptian licensed brokers and portfolio managers-less restrictions for foreign clients.
In a step that relatively reduces the restrictions adopted by the Egyptian Financial Services Authority (“EFSA”) towards trading in foreign securities by Egyptian brokerage and portfolio management companies, its board issued a new decision on 5 March 2014, concerning dealing in foreign securities other than those listed with the Egyptian Stock Exchange (EGX).
The decision permits Egyptian brokerage and portfolio management companies to trade in foreign securities for the benefit of their foreign clients who are not residing in Egypt provided they obtain an additional license from EFSA
However, the decision confirms existing restrictions on Egyptian brokerage and portfolio management companies in dealing in foreign securities, other than those listed with EGX, for their own benefit or for the benefit of one of their Egyptian clients or foreign clients residing in Egypt.
The licensed company must establish a separate registry to record any dealings on foreign securities for their foreign clients who are not residing in Egypt. The registry must include evidence that the purchase price has been settled through offshore sources.
The decision indicates the pressure on foreign currency Egypt is facing and the attempt of the regulator to minimize hard currency outflow.
In 2012, an amendment to the Capital Market Law (Ministerial Decree 572/2012) prohibited Egyptian brokerage and portfolio management companies from dealing in any foreign securities except GDRs. This remains unchanged for Egyptian clients and foreign clients residing in Egypt. However, the purpose of the new decision summarized above is to provide for an exception for non-resident foreign clients.
In a step that relatively reduces the restrictions adopted by the Egyptian Financial Services Authority (“EFSA”) towards trading in foreign securities by Egyptian brokerage and portfolio management companies, its board issued a new decision on 5 March 2014, concerning dealing in foreign securities other than those listed with the Egyptian Stock Exchange (EGX).
The decision permits Egyptian brokerage and portfolio management companies to trade in foreign securities for the benefit of their foreign clients who are not residing in Egypt provided they obtain an additional license from EFSA
However, the decision confirms existing restrictions on Egyptian brokerage and portfolio management companies in dealing in foreign securities, other than those listed with EGX, for their own benefit or for the benefit of one of their Egyptian clients or foreign clients residing in Egypt.
The licensed company must establish a separate registry to record any dealings on foreign securities for their foreign clients who are not residing in Egypt. The registry must include evidence that the purchase price has been settled through offshore sources.
The decision indicates the pressure on foreign currency Egypt is facing and the attempt of the regulator to minimize hard currency outflow.
In 2012, an amendment to the Capital Market Law (Ministerial Decree 572/2012) prohibited Egyptian brokerage and portfolio management companies from dealing in any foreign securities except GDRs. This remains unchanged for Egyptian clients and foreign clients residing in Egypt. However, the purpose of the new decision summarized above is to provide for an exception for non-resident foreign clients.
Trading in Foreign Securities by Egyptian Licensed Brokers & Portfolio Managers
15 March, 2014
Keywords: Infrastructure & Projects, Financial Institutions, Banking & Finance
Trading in foreign securities by Egyptian licensed brokers and portfolio managers-less restrictions for foreign clients.
In a step that relatively reduces the restrictions adopted by the Egyptian Financial Services Authority (“EFSA”) towards trading in foreign securities by Egyptian brokerage and portfolio management companies, its board issued a new decision on 5 March 2014, concerning dealing in foreign securities other than those listed with the Egyptian Stock Exchange (EGX).
The decision permits Egyptian brokerage and portfolio management companies to trade in foreign securities for the benefit of their foreign clients who are not residing in Egypt provided they obtain an additional license from EFSA
However, the decision confirms existing restrictions on Egyptian brokerage and portfolio management companies in dealing in foreign securities, other than those listed with EGX, for their own benefit or for the benefit of one of their Egyptian clients or foreign clients residing in Egypt.
The licensed company must establish a separate registry to record any dealings on foreign securities for their foreign clients who are not residing in Egypt. The registry must include evidence that the purchase price has been settled through offshore sources.
The decision indicates the pressure on foreign currency Egypt is facing and the attempt of the regulator to minimize hard currency outflow.
In 2012, an amendment to the Capital Market Law (Ministerial Decree 572/2012) prohibited Egyptian brokerage and portfolio management companies from dealing in any foreign securities except GDRs. This remains unchanged for Egyptian clients and foreign clients residing in Egypt. However, the purpose of the new decision summarized above is to provide for an exception for non-resident foreign clients.
In a step that relatively reduces the restrictions adopted by the Egyptian Financial Services Authority (“EFSA”) towards trading in foreign securities by Egyptian brokerage and portfolio management companies, its board issued a new decision on 5 March 2014, concerning dealing in foreign securities other than those listed with the Egyptian Stock Exchange (EGX).
The decision permits Egyptian brokerage and portfolio management companies to trade in foreign securities for the benefit of their foreign clients who are not residing in Egypt provided they obtain an additional license from EFSA
However, the decision confirms existing restrictions on Egyptian brokerage and portfolio management companies in dealing in foreign securities, other than those listed with EGX, for their own benefit or for the benefit of one of their Egyptian clients or foreign clients residing in Egypt.
The licensed company must establish a separate registry to record any dealings on foreign securities for their foreign clients who are not residing in Egypt. The registry must include evidence that the purchase price has been settled through offshore sources.
The decision indicates the pressure on foreign currency Egypt is facing and the attempt of the regulator to minimize hard currency outflow.
In 2012, an amendment to the Capital Market Law (Ministerial Decree 572/2012) prohibited Egyptian brokerage and portfolio management companies from dealing in any foreign securities except GDRs. This remains unchanged for Egyptian clients and foreign clients residing in Egypt. However, the purpose of the new decision summarized above is to provide for an exception for non-resident foreign clients.
Insights
Green Hydrogen Pipeline in Egypt
Disclaimer
The information included in this publication/client alert is not legal advice or any other advice. Publications and client alerts on this site are current as of their date of publication and do not necessarily reflect the present law or regulations. Please feel free to contact us should you need any legal advice related to the publication/client alert. Sharkawy & Sarhan (the “Firm”) will not be held liable for any compensatory, special, direct, incidental, indirect, or consequential damages, exemplary damages or any damages whatsoever arising out of or in connection with the use of the data, information or material included in this publication/client alert. This publication/client alert may contain links to third-party websites that are not controlled by the Firm. These third-party links are made available to you as a convenience and you agree to use these links at your own risk. Please be aware that the Firm is not responsible for the content or services offered by and of third-party websites, links as included in the Newsletter nor are we responsible for the privacy policy or practices of third-party websites links included therein.
Authorization of Use
The data, information, and material included in this publication/client alert are solely owned by the Firm. All rights related are reserved under the laws of the Arab Republic of Egypt. No part of this publication/client alert can be redistributed, copied, or reproduced without the prior written consent of the Firm.