{"id":323808,"date":"2021-11-04T11:50:37","date_gmt":"2021-11-04T11:50:37","guid":{"rendered":"https:\/\/egy-africa.com\/en\/?p=323808"},"modified":"2021-11-07T11:53:06","modified_gmt":"2021-11-07T11:53:06","slug":"egypts-financial-regulator-expands-caps-on-margin-trading","status":"publish","type":"post","link":"https:\/\/egy-africa.com\/en\/2021\/11\/04\/egypts-financial-regulator-expands-caps-on-margin-trading\/","title":{"rendered":"Egypt’s financial regulator expands caps on margin trading"},"content":{"rendered":"

The Financial Regulatory Authority (FRA) issued a decision<\/a> on Thursday setting new caps on margin trading of shares of listed companies \u2014 and from what we\u2019re seeing, it appears the authority has expanded them from its previous proposals.<\/p>\n

Newly released regulations would not permit any single investor or related party to purchase on margin more than 3% of a company\u2019s market cap or 5% of its freefloat shares, whichever is higher.<\/p>\n

No single company would be permitted to have over 15% of its outstanding<\/strong> shares held on margin<\/strong>, or 30% of its publicly-traded shares, whichever is higher. In its April proposal, the FRA had suggested that it would limit freefloat shares held on margin to 25%.<\/p>\n

The FRA gave a bit more slack compared to what was previously proposed: In its previous proposal the FRA had wanted to limit a single investor\u2019s margin trading cap at 1% of the company\u2019s market cap or 2% of its freefloat shares. The proposal initially wanted to limit a single company to having a maximum of 15% of its outstanding shares held on margin or 25% of its publicly-traded shares, whichever is higher. Investors would also have had to limit margin trading to 1% of a company\u2019s market cap or 2% of shares on freefloat.<\/p>\n

\u00a0<\/strong>While policymakers are encouraging margin lending, the steep increase in using borrowed funds has tripped a wire at the regulator. The latest decision aims to place limits on concentration risk while implementing measures designed to avoid a market crash thanks to back-to-back margin calls.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Financial Regulatory Authority (FRA) issued a decision on Thursday setting new caps on margin trading of shares of listed companies \u2014 and from what we\u2019re seeing, it appears the authority has expanded them from its previous proposals.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23],"tags":[],"class_list":["post-323808","post","type-post","status-publish","format-standard","hentry","category-money-markets"],"yoast_head":"\nEgypt's financial regulator expands caps on margin trading - egy-africa<\/title>\n<meta name=\"description\" content=\"The Financial Regulatory Authority (FRA) issued a decision on Thursday setting new caps on margin trading of shares of listed companies \u2014 and from what we\u2019re seeing, it appears the authority has expanded them from its previous proposals.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/egy-africa.com\/en\/2021\/11\/04\/egypts-financial-regulator-expands-caps-on-margin-trading\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Egypt's financial regulator expands caps on margin trading - 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