Egypts President Abdel Fattah Al-Sisi has ratified Law No 143 for 2020 that will see amendments to the Central Depository and Registration Law.

The amendments allow the Central Bank of Egypt (CBE) to launch a company specialised in central clearing, depository, and registry of government securities, namely treasury bills (T-bills) and bonds, as well as settlement of financial positions resulting from securities transaction. This would also include managing future contracts activity.

CBEs new company would be a joint stock company owned entirely by the bank or in association with others. The company would be established in accordance with the regulations of companies operating in the securities field.

The amendments aim to develop the legislative structure for non-banking financial activities in Egypt, and increase their flexibility regarding changes in the capital market activity. It is anticipated that the amendments will strengthen the competitiveness of Egypts national economy and protect customers.

The provisions of Article 7 of the new law require the transfer of T-bills and bonds deposited with existing companies at the time of the laws issuance to the CBEs central clearing, depository and registry within six months of its launch.

Mohamed Omran, Chairperson of the Financial Regulatory Authority (FRA), stated that the authoritys Board of Directors will in turn issue the necessary rules and executive procedures to implement the amended provisions.

Omran added that the amended law authorises the FRAs Board of Directors to issue rules regulating the deposit and registration of government securities. It also includes the creation of a fund to ensure obligations resulting from securities transaction are fulfilled, under the guidance of the CBE and the Ministry of Finance.

Omran also explained that the law grants the FRAs board of directors the ability to regulate how central deposit and registry companies form their boards of directors. It would additionally define the maximum fees for the services provided by these companies to protect securities dealers and reduce the process costs.

The amendments also allow the FRA to determine the controls governing the ownership structure of companies operating in central depository and future contracts.

According to Omran, the establishment and licensing of companies undertaking clearing and settlement operations for future contracts will be carried out in accordance with the provisions governing the companies operating in the securities field.

2020 Daily News Egypt. Provided by SyndiGate Media Inc. (Syndigate.info).

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