EGYPT Law and Practice Contributed by: Ibrahim Shehata, Hesham Kamel, Mohamed Abed and Hamza Shehata, Shehata & Partners Law Firm
• the Block Trades System aims to break up large transactions into smaller ones, execut - ing them gradually to minimise their overall impact on the security’s market price and help to maintain price stability and fairness for all investors; • the Surveillance System – the measures implemented by the EGX to uphold investor protection include a mechanism for verifying that transactions comply with all applicable laws, regulations and procedures; • the Operations System (OPR) – to use this system successfully, the customer needs to meet certain eligibility criteria; • the Disclosure System is the mechanism for the dissemination of material information con - cerning publicly traded securities; and • the OTC Trading System is for trading unlist - ed companies. 6.2 Regulation of Different Asset Classes Please see 6.1 Permissible Trading Platforms . 6.3 Impact of the Emergence of Cryptocurrency Exchanges Please see 3.1 Requirement for Different Busi - ness Models . 6.4 Listing Standards The EGX’s listing and delisting rules regulate every aspect of the process for both domestic and foreign companies seeking to list their secu - rities on the exchange. These rules encompass eligibility criteria, application procedures and ongoing reporting obligations. For instance, the FRA has recently reduced the minimum required number of shares to be eligi - ble for listing on the EGX; the new FRA regula - tions now stipulate that companies shall offer no less than 1% of the total free-float market cap. The FRA has also introduced an additional
amendment whereby it allows companies to reg - ister their securities without initially meeting the minimum requirements for the percentage of the shares offered, the number of shareholders and the percentage of free-floating shares. However, such companies must complete the offering and commence trading within six months of registra - tion, with the possibility of an extension subject to FRA approval, compared to the previous one- month timeframe. 6.5 Order Handling Rules The Egyptian Capital Market Law and its execu - tive regulations establish the general principles for order handling on the EGX. These principles include best execution, price priority and time priority. 6.6 Rise of Peer-to-Peer Trading Platforms Peer-to-peer (P2P) trading platforms refer to the direct buying and selling of cryptocurren - cies among users without intermediaries – eg, Binance, Huobi, OKX, Paybis. Egypt’s regulatory framework for P2P trading is still evolving, but any entity that is willing to engage in any activity related to cryptocurrencies or electronic money must first obtain a licence from the CBE. In this respect, it must be noted that the CBE maintains a strong stance against cryptocur - rencies, issuing multiple warnings highlighting the substantial risks involved in cryptocurrency trading. Furthermore, engaging in such activities without a licence carries a risk of imprisonment for up to ten years and/or a fine ranging from EGP1 million to EGP10 million. 6.7 Rules of Payment for Order Flow Payment for order flow is not expressly regu - lated under Egyptian law, instead falling under
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