Arabic version: مصر تضع قواعد جديدة للضمانات في البيع على المكشوف

According to Allafrica, Egypt has issued new rules for short selling on the Egyptian Exchange, requiring investors to provide cash collateral worth at least 50% of the market value of borrowed securities. The Financial Regulatory Authority approved the framework under Resolution No. 155 of 2026.

Short selling enables an investor to borrow shares, sell them and later buy them back. Investors can profit if prices fall, but face losses if prices rise. Under the new system, Misr for Central Clearing, Depository and Registry will retain the proceeds from the sale of borrowed shares, while brokers must collect the additional 50% cash collateral before a trade.

The arrangement creates initial coverage equal to 150% of the value of borrowed shares. MCDR will operate a central lending platform linking the exchange, brokers and custodians. It will record transactions, monitor limits, and revalue borrowed shares and collateral daily.

Sale proceeds will be invested in fixed-income instruments or other products approved by the FRA until a position closes. Lenders will receive lending fees while retaining rights to dividends and other financial benefits. Short positions cannot exceed 40% of a company’s free-float shares, while a single lending arrangement is capped at 5%. One investor and related parties may borrow no more than 2%.

Brokers offering short selling must have at least EGP 5 million in shareholders’ equity, rising to EGP 10 million if they also provide margin trading. They must also maintain a net liquid capital ratio of at least 15%. Existing approved firms have one month after publication of the rules to install required systems before the framework takes effect.