March 12, 2017

Consolidated Rules for the OTC Market

The board of the Egyptian Financial Supervisory Authority (EFSA) issued Decree no. 17 of 2017 to consolidating and unifying the rules pertaining to EGX Over the Counter (OTC) market for trading unlisted securities, proof of transfer of ownership and their publication (the "Rules"). The Rules replace EFSA‘s decisions issued during the period
between 1994 and 2012 in relation to OTC. According to the Rules, the OTC market is
divided into two markets:

  1. The Deal Market under which the brokerage firm shall notify the EGX about the
    transaction within one week from the date of the sale and purchase orders. The
    brokerage firm is required to confirm the validity of the transaction and its
    compliance with the laws and regulations. EGX will then issue a confirmation of the
    transfer of ownership and announce all information related to the transaction.

    A transaction or a number of related transactions with a value of more than EGP 20
    Million must be notified to the Market Operations department at EGX in advance.

  2. The Order Market relating to delisted securities which are centrally deposited.
    Orders shall be executed according to priorities, similar to what applies on the
    exchange trading. Clearing and settlement of trades executed on this market shall be undertaken on T+3

Transactions, whether in the Deal Market or the Order Market, with value more than
EGP 100,000 must be executed through local bank accounts unless the transaction is
between related parties.

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