- Egypt’s FRA grants the Egyptian Exchange its first license to trade financial derivatives, marking a major capital market milestone.
- The derivatives market will launch in four stages, starting with EGX30 futures, followed by EGX70, individual stocks, and options contracts.
- Seven brokerage firms applied for licenses, while foreign investors show growing interest, signaling confidence in Egypt’s market development and stability.
FRA
The Financial Regulatory Authority (FRA), chaired by Dr. Mohamed Farid Saleh, announced that Egyptian Exchange (EGX) has been granted the first license to operate a futures exchanges for derivatives on securities listed in the Egyptian market.
Derivatives
FRA Chairman Dr. Mohamed Farid Saleh, disclosed that the launch of the derivatives market in Egypt will follow four stages:
- Stage One: Issuance of futures contracts on the EGX30 index, with trading expected to start in March.
- Stage Two: Futures contracts on the EGX70 index.
- Stage Three: Futures contracts on individual stocks.
- Stage Four: Options contracts on stocks and indices.
Dr. Farid also emphasized the implementation of a comprehensive risk management system in the derivatives market. This will help reduce systemic risk and ensure the market’s ability to withstand various fluctuations.
The Chairman also noted that the licence was granted after completing the necessary regulatory and legislative framework. In addition to completing full coordination with the EGX and Misr for Clearing, Settlement and Central Depository (MCDR). This ensures the application of the highest governance and compliance standards, protection of investors’ rights, and maintenance of market stability and integrity.
Investor Interest
Chairman Dr Farid also revealed that seven brokerage firms have already applied for licenses to operate in futures trading. This reflects a strong interest in participating in the new market and investors’ eagerness to develop their investment tools.
In regard to this matter, Dr. Islam Azzam, Chairman of the Egyptian Exchange, notes that FRA and the Exchange held regular weekly meetings to coordinate every detail of the derivatives launch.
The Chairman of the EGX also noted that this initiative has attracted the attention of several foreign investment funds. These foreign investment funds have requested meetings with the Exchange to discuss trading opportunities in Egypt’s derivatives market. This signals international investors’ confidence in the local market’s development.
He also adds that close collaboration between the FRA and the Exchange will enable the application of the best risk management systems, ensure market stability, and protect investors’ rights. Thus, placing Egypt on a path of sustainable financial market growth and enhances market depth and liquidity.
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