The meeting examined the latest progress on the operational infrastructure and electronic systems required to implement the new regulatory framework recently announced by the FRA.
Islam Azzam, chairman of the Financial Regulatory Authority (FRA), held an expanded meeting with senior officials from the Egyptian Exchange, Misr for Central Clearing, Depository and Registry, and other parties involved in the market’s technological development to review preparations for activating short selling.
The meeting examined the latest progress on the operational infrastructure and electronic systems required to implement the new regulatory framework recently announced by the FRA.
Participants reviewed developments related to the central securities lending system, which aims to fully connect Misr for Central Clearing with the Egyptian Exchange, brokerage firms, and custodians. The system will document every stage of securities lending and borrowing transactions associated with short selling.
According to the FRA, borrowers will be able to review available lending offers and select those that align with their investment strategies, while lenders will be able to monitor offers registered on the platform, improving market transparency and efficiency.
The meeting also discussed plans to train licensed brokerage firms on the new system and ensure their technological readiness and full integration with the central lending platform before implementation begins.
Azzam said the FRA aims to complete all technical requirements and training programmes in the near future to ensure the mechanism is launched efficiently while maintaining high standards of governance, transparency, and investor protection.
He added that successful implementation would require cooperation among all capital market participants to raise awareness of modern investment instruments. Short selling, he noted, can help increase liquidity, improve price discovery, and deepen the market.
The initiative forms part of a broader plan to develop Egypt’s capital market, following the launch of the derivatives and futures market, the introduction of regulations governing hedge funds, and the decision to allow existing investment funds to operate as hedge funds for the first time, enabling them to conduct short-selling transactions and invest in financial derivatives.
