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The Egyptian Exchange Amends the Listing Rules Executive's Procedures
Feb 01, 2015
In a move aiming to develop the Egyptian Exchange (EGX)’ trading system and to achieve greater efficiency, EGX board approved the amendments of the listing and disclosure rules’ executive procedures. Amending 36 articles of the executive rules has been approved. Those amendments were approved by the Egyptian Financial Supervisory Authority (EFSA) chairman.

Those amendments aim to improve the levels of the shareholders’ rights protection, were a requirement was set that there shouldn’t be any Judicial rulings issued against any of the major shareholders and board members of the companies wishing to list, or requests to move criminal proceedings by EFSA resulting of violating the capital market law and its executive regulations, or the case that one of them is in investigation.

Moreover, the new amendments organized the Initial Public Offering (IPO) procedures which are performed to fulfill the listing requirements. Their procedures were facilitated along with preserving the shareholders’ rights, particularly with regard to the adoption of the independent financial advisor’ study of the shares’ fair value.

The amendments included deepening and clearly identifying the governance application scope to attract companies that have a clear governance structure. From the other hand, the amendments have set clear disclosure controls for the acquisitions or exits operations performed on assets representing 10% or more of the total shareholders’ equity.

The amendments also identified the controls to list the issued capital increase resulting of mergers, and the controls to list the amendments resulting from restructuring the listed companies by division and adjusting the nominal value, as well as clear disclosure regulations for the cash increase usage aspects after listing the shares’ increase.

From his part, Dr. Mohammad Omran, EGX Chairman noted that the new amendments would ensure the application of the best listing and disclosure practices to keep track with international standards, at the same time to be a clear signal of EGX’ regulatory environment flexibility, as we benefited from what’s resulted of the rules’ practical experience with regard to the need for some amendments to help achieving greater effectiveness and efficiency.

Omran said that the main EGX’ goal is to facilitate listing and capital’ increases process, and at the same time to maintain shareholders’ rights, stressing that the additional amendments of governance will help to expand the corporate governance scope before listing in EGX.

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