Egyptian Regulator Ratifies Beltone’s ETF Prospectus

Big 5

Egypt’s market regulator, the Egyptian Financial Authority (EFSA) has finally endorsed the financial investment firm Beltone Financial Holding’s prospectus for the first exchange-traded funds (ETFs) on local market.

According to the top official EFSA Chairman Sherif Samy, ETFs enjoy relatively high liquidity as the fund contracts with the market maker(s) to provide liquidity on certificates and thus certificate holders will have two sources of liquidity.
Last month, EFSA has licensed Beltone Financial Holding to undertake the ‘market maker’ activities, as per provisions of the capital market law and its executive bylaw.  

Last March, EFSA has released rules to facilitate the creation of index and real estate funds as well as amendments to margin trading rules.

Egypt’s stock exchange has granted in April Beltone (BTFH.CA) the country’s first licence for exchange traded funds (ETF). EGX signed an agreement to grant the first license to an Egyptian financial firm to use EGX30 to setup XT Misr ETF’s, Beltone Financial wins the first license to start the ETF’s in the Egyptian capital market.

Beltone Financial was the first company to express interest in ETFs, which are listed investment funds, and is launching a fund called XT-Misr that mirrors the performance of the country’s EGX 30 stock index.

EGX issued its executive decision to start applying the regulations for both ETFs and market maker activity in the beginning of April 2014.