Sherif Samy: The protection granted for dealers of listed securities is not granted in the Over-the-counter (OTC)
EFSA’s BOD decision no. 17 of 2017 on regulating trading rules and proof of ownership was published in the Egyptian Gazette (issue no. 46). Sherif Samy EFSA’s Chairman noted that the decision comes into force starting from today. It includes transfer of ownership in addition to automated trading system(s), or what is known as the Over-the-counter (OTC).
Sherif Samy revealed that trading in unlisted securities or proof of ownership shall be held through automated trading system(s) or OTC . He added that this shall be applied only on delisted securities deposited by central depository system. Trading shall be held according to this mechanism for two days a week, as determined by the Stock Exchange the same way as it determines trading hours. Transactions shall be settled through this system in the third day of transaction T+3.
He stressed that if there will be any amendments to the data or issuance elements of these securities that are traded on the OTC, the Stock Exchange will stop trading in them in accordance with this mechanism, that is if the Exchange’s rejects the continuation of trading in these securities in light of the justifications offered by the company and accepted by the Stock Exchange.
He stressed that the rules set for trading in listed securities are not applied on trading in unlisted securities. He added that the closing price will not be calculated and price limits will not be defined and price indices will not be calculated as well, so in this respect, the protection granted for dealers of listed securities is not granted in the Over-the-counter (OTC).
Sherif Samy pointed out that all brokerage firms shall deal with its clients through its accounts in the banks that are subjected to the supervision of the Central Bank of Egypt (CBE) if the value of the transaction exceeded one hundred thousand pounds. On the other hand, it shall deal with clients from outside the country through the banks referred regardless the value of the transaction. The purchaser may prove that he deposits the value of the transaction in the bank account within a month at most from the date of submitting a request for holding the transaction.
EFSA has issued this decision to replace other decisions issued between 1994 and 2012. Each of these decisions regulated part of the transactions of unlisted companies or was issued to amend other decision. The new decision includes certain procedures set for the transfer of ownership in the light of its application over the past years.