EGYPT Law and Practice Contributed by: Dina Kamel, Helal El Hossary, Omar Fouda and Kareem Hashem, Zaki Hashem
7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations In Egypt, there is no standalone algorithmic trading law. The regulated activities are dealing and brokerage services, portfolio management, fund management, market-making and futures brokerage. In practice, automated tools must be designed and used so that they do not facilitate market abuse and manipulative orders, such as practices that create a misleading appearance of trading or artificially manipulate prices The Capital Markets Law and Ministry of Investment Decree No 293 of 2007 regulate market-maker licens - ing and activity. Market makers are licensed to operate in accord - ance with the procedures set out in the Capital Mar - kets Law. The board of directors of the FRA sets the standards for financial solvency and the expertise and competence required to conduct market making, in addition to the requirements for membership of the EGX. The market maker is obligated to: by submitting orders to trading systems. 7.2 Requirement To Be Licensed or Registered as a Market Maker When Functioning in a Principal Capacity • buy and sell the securities they are committed to making a market for, at their own expense, during official trading hours – provided that these securi - ties are listed on the EGX; • submit sell offers and buy orders for the securities they are committed to making a market for during official trading hours; and • adjust the offers and orders they submit within the period specified by the EGX administration. The difference between the bid and ask prices, and the quantities of the bids and asks, must not exceed the percentage and quantities determined by the EGX based on the type of security and its trading activity. If the EGX objects to the prices of the offers and orders submitted by the market maker, they must submit realistic prices. If they fail to do so, the EGX president may suspend offers and orders subject to the objec -
tion and inform the authority. The market maker may engage in margin trading and borrow securities for the purpose of selling securities they make a market for, provided that such securities are allowed to be traded in accordance with these activities. 7.3 Regulatory Distinction Between Funds and Dealers The regulators in Egypt distinguish sharply between funds and dealers. Funds are defined as collective investment vehicles. They convert investor subscrip - tions into fund units, invest according to an approved investment policy and operate according to the gov - ernance requirements of the Capital Markets Law and Prime Minister Decree No 135 of 1993, as amended. Dealers and brokers are defined and regulated as market intermediaries. They execute and route orders, may deal for their own accounts and are supervised in relation to conduct, client asset protection and mar - ket integrity. Dealers and brokers are both subject to market abuse prohibitions and disclosure duties, but their client-facing obligations and licensing perimeter are different. 7.4 Regulation of Programmers and Programming While programmes and programmers are not in and of themselves regulated, the licensed firm that deploys the tool or product is regulated. Companies are required to maintain and ensure governance, controls, audit trails and compliance so that programmes do not enable prohibited trading behaviours (governed by the Capital Markets Law). In Egypt, insurers generally follow a standard under - writing workflow. They collect proposal data, assess risk, set pricing and terms, decide on acceptance or exclusions, arrange reinsurance where needed, and issue and administer the policy – increasingly through digital channels. Regulation does not prescribe a single underwriting “method”, but it does impose guardrails that directly shape how underwriting is done under FRA supervi - 8. Insurtech 8.1 Underwriting Processes
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