Monday March 24 2025
News Source: Global Exchanges
Focus: Clearing & Settlement
Type: General
Country: Egypt
On 21st March 2025, the Financial Regulatory Authority (FRA) announced implementation of the decisions issued by the Board of Directors regarding the development of rules and procedures governing the work of the Settlement Guarantee Fund, which works to reduce the risks arising from representing the counterparty in settlements (Central Counterparty Clearing Risk), the Misr Clearing and Depository Company (MCDR) and the Settlement Guarantee Fund have begun activating the necessary programs to settle transactions arising from securities trading for periods whose settlement is less than the regular T+2 period, at six times the value of the Fund members’ subscriptions, starting from trading session, Sunday, March 23rd, 2025.
This decision will contribute to enhancing liquidity and trading levels in the stock market by enabling the Fund’s member entities to request settlements worth six times their subscription amount to the Fund, as the Settlement Guarantee Fund works to reduce the risks arising from representing the counterparty in settlements (Central Counterparty Clearing Risk).
This comes as part of the ongoing efforts undertaken by the FRA to develop and stabilize non-banking financial markets and protect the rights of all stakeholders. It also seeks to take all necessary measures to enhance liquidity levels, stimulate trading, and increase stock turnover and movement. This supports efforts to enhance the efficiency and competitiveness of the Egyptian stock market, enabling it to play a more effective role in supporting economic development plans.
The Financial Regulatory Authority (FRA) approved the rules and executive procedures governing the Settlement Guarantee Fund, prepared by Misr for Central Clearing and Depository (MCD), during the current month of March. The aim is to align with international best practices for the Settlement Guarantee Fund, which will work to mitigate the risks arising from representing the counterparty in settlements. The WATERFALL concept was implemented, allowing the fund’s resources to increase by 650% of the value of member subscriptions.
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