Aggregated News From Investment Management Regulators

For the fourth year in a row: Egypt Continues Progress on the ?Protecting Minority Investors indicator? – Sunday 27/10/2019

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• Dr. Omran: Jumping 76 places on the “Protecting Minority Investors indicator” in the World Bank Group’s Doing Business within the last four years represents  an attractive element that promote investment in the Egyptian capital market
• Dr. Omran: Egypt leads MENA region in shareholder rights index and achieves significant progress on “corporate transparency index”
• Dr. Omran: Egypt is the highest ranked in the four sub-indices of the “Protecting Minority Investors indicator” precedes Organization for Economic Co-operation and Development (OECD) high-income countries.

Dr. Mohammed Omran – FRA’s Chairman reiterated that FRA will keep taking  regulatory steps that promote investment climate in Egypt, following the results of the World Bank Group’s annual Doing Business Report 2020. He announced that for the fourth year in a row, Egypt has made remarkable progress on the “Protecting Minority Investors indicator” by jumping 15 places to rank  57th this year. Also, FRA’s Chairman added this is the highest ranking Egypt received among all the indicators that included in the World Bank’s assessment noting that this was due to certain decisions issued by FRA’s BOD to enhance protection of minority rights. First of which were amendments to listing and delisting rules that obliged  the listed companies to obtain the approval of the General Assembly upon wishing to increase the issued capital.

FRA’s Chairman said that Egypt ranked 57th out of 190 countries on “Protecting Minority Investors indicator”, jumping 15 places from the previous year. Also, he noted that Egypt achieved a progress by 76 places in the index since 2015, adding that Egypt led the MENA region in four important sub-indices.  Egypt got the final score in the sub-index of shareholders’ equity. On the other hand, the MENA region scored only 3.2, Egypt scored 6 out of 7 points on “ownership and control” sub-index and the MENA region obtained only 3.5. In addition,  Egypt scored 8 out of 10 points in the “Disclosure” sub-index as a result of the regulatory decisions issued by FRA’s BOD that were issued  to enhance disclosure and transparency and increase efficiency of the  regulatory framework of corporate governance and protection of small shareholders. Meanwhile, while MENA scored 6.4 points.

Dr. Omran pointed out that the results achieved by Egypt in the four sub-indicators were compared to the results of the Organization for Economic Co-operation and Development (OECD) high-income countries. The report showed that the Organization for Economic Co-operation and Development (OECD) high-income countries scored 5.7 points in the “Transparency” sub-index, 4.5 points in the “Ownership and Control” sub-index, 4.7 points in the “shareholders rights” sub-index, and 6.5 points in the “Disclosure” sub-index.

FRA’s Chairman stressed that the progress in the “Protecting Minority Investors indicator” contributed to the advancement of the overall ranking of Egypt 6 places to occupy 114th place out of 190 countries. He pointed out that this progress achieved by Egypt is the result of cooperation and coordination between the Ministries, the concerned authorities and the team responsible for communicating with the World Bank team.

The Doing Business Report is one of the most important international reports issued by the International Finance Corporation (IFC). Doing Business 2020 measures regulations across 190 economies in 12 business regulatory areas to assess the business environment in each economy. The report looks at rules affecting a business from inception through operation to wind-down: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

It is worth mentioning that this progress coincided with announcing the results of the Global Competitiveness Report 2019 issued by the World Economic Forum. FRA’s efforts in the field of “management of shareholders equity” contributed to the continued rise of Egypt’s ranking in “management of shareholders equity” sub-indicator for the third year in a row. The Report showed that Egypt jumped 36 places in this sub-indicator since 2017. This year Egypt ranked 28th  out of 141 countries compared to 64th out of 137 countries in 2017 in the said sub indicator.

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Regulator Information

Abbreviation: FRA
Jurisdiction: Egypt

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