Egypt to launch short selling within weeks, regulator says

Egypt will launch short selling within weeks after completing the Centralised Lending System and finalising technical integration among market participants, Financial Regulatory Authority (FRA) Chairman Islam Azzam said on Saturday.

Market participants are being trained to use the system on a trial basis ahead of the official launch, Azzam said, describing the mechanism as a major step in modernising Egypt’s capital market.

The new short-selling framework, issued under FRA Board Resolution No. 155 of 2026, sets rules aimed at ensuring transparency, governance and protection of the rights of market participants in line with international best practices, Azzam said.

The launch follows the introduction of Egypt’s derivatives market in March and the rollout of futures contracts on selected leading stocks on the Egyptian Exchange, he added.

The FRA has also regulated hedge-fund activities and allowed the establishment of hedge funds for the first time, enabling them to conduct short-selling transactions and invest in derivatives and other financial instruments, he added.

Azzam said the ongoing modernisation of the capital market would help deepen the market, improve price discovery, increase liquidity, and provide investors with a wider range of investment options.

The number of newly registered investors exceeded 171,000 by the end of the second quarter of 2026, while trading values surpassed 6.4 trillion Egyptian pounds during the quarter, an increase of 78.3 per cent from the same period a year earlier, according to the FRA.

Azzam said the authority was also prioritising the introduction of a market-maker mechanism to stimulate trading and improve liquidity, particularly as the Egyptian Exchange prepares for the listing and offering of several major state-owned companies.