The Egyptian Financial Regulatory Authority’s (FRA) Committee for Establishing and Licensing Companies granted Pharos Securities Brokerage approval and a license to practice short selling, the brokerage announced on Tuesday.
The approval comes pursuant to the decision of the FRA No 268 of 2019 issued in February to regulate the practice of borrowing securities for the purpose of selling.
“Obtaining the license from the FRA is in line with the company’s strategy to engage in new activities and diversify our portfolio of services in Egypt and abroad. Although the practice of short selling is new in Egypt, it has long existed in foreign markets and will allow us to meet all our customers’ requirements,” said Pharos Holding for Financial Investments Chairperson and CEO, Elwy Taymour.
Managing Director and Head of Pharos Securities Brokerage, Essam Abdel Hafiez, stressed the importance of providing this service to expand the company’s customer base, and to continually building on Pharos Securities Brokerage’s successes in the market, both locally and regionally.
Short-selling securities is a mechanism that allows investors to borrow securities and sell them on the open market, concurring to buyback at an agreed time and price, incurring a profit from the price difference between the sale and purchase of the security.
Short-selling thus attracts new funds and contributes to the increase in trading volume and liquidity of the Egyptian Exchange.