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The stock exchange proposes amendments for start-up companies to expand through the capital market

Dr. Mohamed Farid, Chairman of the Board of Directors of the Egyptian Stock Exchange, submitted proposed amendments to the rules for listing and delisting securities in the stock exchange to the Financial Supervisory Authority to study and implement its affairs in accordance with the provisions of the Capital Market Law, after presenting to Dr. Mostafa Madbouly, Prime Minister during his meeting with a number of pioneers Businesses who have succeeded in turning their ideas into reality.


Dr. Mohamed Farid, Chairman of the Board of Directors of the Egyptian Stock Exchange, said that the proposed amendments come in response to the rapid changes in the business models of emerging companies, which differ from traditional companies, stressing that they are amendments, if approved by the Authority, that could open new horizons for emerging companies that enjoy strong growth opportunities for expansion. Through the capital market, increasing the volume of its business and a greater contribution to the growth of the Egyptian economy, adding that listing and trading emerging companies on the stock exchange enhances the opportunities to attract foreign investments and diversifies investment options for all categories of investors.


The proposed amendments included the introduction of a new Article 8 bis, which regulates the process of listing the shares of Egyptian companies with the purpose of acquisition, in line with international best practices in this regard, and which permits the registration of shares of Egyptian companies whose sole purpose is acquisition, provided that its articles of association stipulate that the proceeds of The capital increases are invested in savings vessels with a fixed return and set aside by the recipients of the subscriptions until the acquisition, and in the event that no acquisitions are made within two years from the date of registration, the funds will be refunded to the investors with the return achieved for them and they will be written off in accordance with Clause (9) of this article, provided that The company has a contract with one of the investment managers licensed by the Financial Regulatory Authority working in the field of direct investment or venture capital.


The proposed amendments also include the introduction of some amendments to Article 44 of the rules for listing and delisting securities in the Stock Exchange, to facilitate the acquisitions of listed companies on unrestricted companies with the condition that the companies subject of the acquisition adhere to full governance standards and achieve a compound growth rate according to revenues, which opens the way to raise market capital For companies listed on the stock exchange by acquiring large entities, which will benefit the Egyptian capital market and the economy as a whole.