Islam Azzam, Deputy Chairperson of the Financial Regulatory Authority (FRA), met with representatives of asset management companies in the Egyptian market to discuss ways of stimulating institutional investment in the capital market.
During the meeting, the two sides also discussed methods of increasing market depth, with the participation of the authority’s concerned departments.
Azzam said that the meeting involved investment managers discussing and exploring their views on how to increase institutional investment in the capital market.
It also covered how the authority can provide maximum support for developing and revitalising the Egyptian Exchange (EGX).
The meeting was concluded with an agreement that investment managers would submit a working paper identifying the necessary proposals to support the market within two weeks.
The paper will underline the FRA’s insistence on providing full support for developing and revitalising the EGX, while holding successive meetings with other market institutions.
In this context, Azzam noted that, after the meeting, FRA Chairperson Mohamed Omran directed that a letter would be issued regularly for all private insurance funds.
This would ensure that they can take the necessary measures to reconcile their positions in accordance with the provisions of Article 14 bis (1) of the executive regulations of Law No 54 of 1975.
The provisions of this law include establishing a fund with a value of invested funds that exceeds EGP 100m. This will mean an investment manager licensed by the FRA, or one or more companies, will be brought on board to manage at least 80% of its funds in accordance with Article 14.
In a related context, Azzam met with officials, bond issuers, and investment and asset management companies in the Egyptian capital market to discuss their proposals regarding stimulating trading in debt instruments.
He promised them that the FRA’s Board of Directors will simplify regulatory procedures to proceed in offering bonds, whether private or public.
To increase incentives for debt instruments, the package of decisions issued last year by the Prime Minister and the FRA’s Board of Directors granted a reduction in the cost of bond trading services.
This also saw a cost reduction on financing instruments and debt instruments listed on the EGX, equivalent to 50% of the cost for services applied to stock trade operations.