Egypt’s stock exchange listing rules should be viewed as a pivotal tool for ensuring the quality of companies and building market efficiency rather than as mere regulatory hurdles, Mohamed Farid, Chairperson of the Financial Regulatory Authority (FRA), said on Tuesday.
Speaking at the 9th Capital Markets Summit, titled “Fintech: The Path to Investment Inclusion,” Farid stated that recent amendments to listing rules were designed to enable growth-stage companies to access the benefits of public listing. He cited the Egyptian Special Purpose Acquisition Company (SPAC) model as a successful practical example of regulatory flexibility, allowing promising firms to secure funding and institutional visibility without being restricted by traditional listing paths.
Farid noted that there is a direct correlation between confidence in regulatory reforms and overall market confidence, adding that the more market participants believe in the feasibility of these reforms, the greater the appetite for investment and trading. He explained that listing on the exchange makes companies more attractive for mergers and acquisitions due to the transparency, disclosure, and structural discipline required of public entities.
The chairperson also addressed the role of technology in driving investment inclusion, highlighting the implementation of electronic Know Your Customer (eKYC) protocols. This regulatory shift has been foundational for the development of fractional real estate investment, resulting in more than 21 applications to establish investment funds in this field, whereas only two such funds existed in the Egyptian market prior to these changes.
Regarding market infrastructure, Farid explained that the development of the trading system for the secondary bond market is a vital step toward enhancing efficiency. He stated that this system helps establish an accurate yield curve reflecting supply and demand, which supports informed investment decisions and pricing transparency. He underscored that genuine reform is a participatory process requiring a level of readiness from companies and institutions that matches that of the regulator.
Farid observed that many current market tools are the result of long-term strategic planning, pointing out that work on financial derivatives began in 2007 and the short-selling mechanism in 2003. He argued that listing contributes to a fundamental transformation in management style and corporate governance, stressing that companies must invest in human capital and training to achieve long-term sustainability.
The opening session, moderated by Fatma Salah, Managing Editor of Al-Borsa newspaper, was attended by Finance Minister Ahmed Kouchouk, Egyptian Exchange Chairperson Islam Azzam, and various officials from investment entities. Farid concluded by stating that when regulatory rules are drafted with a developmental vision, they become a true driver for economic growth rather than just a formal framework.
