الهيئة العامة للرقابة المالية

FRA Chairman Leads Expanded Meeting on New Short-Selling Regulations – Wednesday 29 July 2026

The meeting convened leaders from the Egyptian Exchange (EGX), MCDR, brokerage firms and investors to review the final steps toward launching short selling mechanism.

Dr. Islam Azzam – FRA Chairman:

• Short selling will boost the Egyptian Stock Exchange’s appeal and drive market liquidity.
• The new regulatory frame explicitly defines all parties’ roles with full system integration.
• Designed to draw in foreign funds and younger retail investors.
• Success hinges on widespread investor awareness and market education.
• FRA reaffirms its commitment to align with market stakeholders before issuing non-banking financial rules.

Financial Regulatory Authority (FRA), chaired by Dr. Islam Azzam, convened an expanded meeting at its headquarters to discuss the new regulatory framework for Short Selling on the Egyptian Exchange scheduled for release in the coming days.

The meeting was attended by Mr. Omar Radwan, EGX Chairman ; Dr. Khaled Serry Seyam, Chairman of Misr for Central Clearing, Depository and Registry (MCDR); Mr. Mohamed Al-Sayyad,  FRA Vice Chairman. In addition to Mr. Mohamed Sabry, EGX Vice Chairman; Eng. Hisham Mabrouk, Managing Director of MCDR; along with senior leaders and technical teams from FRA, EGX, capital market stakeholders and brokerage firm representatives.

Dr. Islam Azzam emphasized that discussions surrounding the new short-selling framework reflect the Authority’s commitment to maintain continuous dialogue with market participants. He noted that listening to diverse perspectives and proposals helps refine regulatory frameworks by consensus, enhancing overall market readiness for upcoming developments and boosting the Egyptian market’s appeal to both domestic and foreign investors.

Short selling is a trading mechanism that enables investors to trade securities when anticipating a decline in a stock’s price. Under this mechanism, an investor borrows shares from their owner, sells them at the current market price and repurchases them later at a lower price to return them to the original owner.

The mechanism operates through a Lender (the original owner of the securities) and a Borrower (the investor borrowing the securities to sell and rebuy based on downward price expectations), allowing the borrower to profit from the price differential between the sale and repurchase based on the investor’s expectations of market movements and stock price fluctuations.

When anticipating a price decline in a specific security, an investor may borrow shares from an eligible lender and execute a market sale, backed by a required cash margin.

Upon price drop, the borrower repurchases the shares, realizes a net profit after deducting borrowing costs and returns the securities to the original owner.

Conversely, if shares’ price rises and the borrower wishes to limit their losses, they repurchase the shares at a loss and return them to the lender, incurring additional borrowing costs.

In both scenarios, the lender earns a return on lending their shares while retaining all other ownership rights and benefits associated with the security.

During the meeting, participants reviewed the latest developments in finalizing the regulatory and operational infrastructure for the short-selling mechanism. The objective is to ensure a fully integrated rollout that aligns with international best practices regarding transparency and governance, while guaranteeing continuous connectivity among all market participants to expand and deepen the market.

Attendees also reviewed key components of the new regulatory framework governing short selling. The framework aims to streamline procedures for all investor segments and drive adoption upon its official launch on the Egyptian Exchange.

For his part, Dr. Islam Azzam emphasized that the success of short selling requires intensifying market awareness and promoting investment literacy among prospective borrowers and lenders alike, ultimately driving market efficiency and boosting liquidity.

FRA Chairman further commended the pivotal role played by Misr for Central Clearing, Depository and Registry (MCDR) in establishing the Central Lending System. The system documents all operational stages and procedures—specifically displaying available lendable securities by name, quantity, lending duration, and acceptable rate, while maintaining comprehensive records of borrowing transactions, lenders, borrowers, and transaction closures—serving as the core technical foundation for the new system’s success.

He added that the new regulatory framework will boost participation in short selling among foreign and younger investors. It expands available investment avenues, enables more efficient portfolio management, creates greater opportunities to generate returns, capitalizes on price movements, and allows reinvestment of profits into new opportunities.

FRA Chairman explained that the updated rules ensure rapid responsiveness to market shifts, driving efficient risk management and investor protection. This is achieved through full integration between brokerage firms and MCDR, explicitly defining the duties and responsibilities of each party at every stage of short-selling transactions—from stock lending availability to final settlement.

Regarding the insights and proposals shared by brokerage representatives and investors during the session, Dr. Islam Azzam stated that FRA takes all market perspectives into account when drafting or amending non-banking financial sector regulations to proactively resolve potential operational challenges.

Concluding the meeting, FRA Chairman noted that coordination remains ongoing with the EGX, MCDR, and market participants to launch short selling after years of anticipation and technical and legal deliberations. Highlighted as one of the most successful instruments in regional and global capital markets, Dr.  Islam Azzam urged brokerage firms to swiftly build technical and operational readiness to seamlessly integrate into the new system as soon as possible.

FRA Approves Real Estate Crowdfunding – Wednesday 29 July 2026

• • The Authority mandates each company individually to abide by financing controls for individuals and legal entities, while applying financial solvency standards.
  • The Authority emphasizes the necessity of adhering to concentration ratios and the legislative and regulatory frameworks of the activity.

   Dr. Islam Azzam – FRA Chairman:

  • Allowing crowdfunding aims to curb the adverse impacts of rising prices on market competitiveness.
  • FRA is keen to balance business growth with effective market controls to safeguard the rights of all market participants.

  Financial Regulatory Authority (FRA), chaired by Dr. Islam Azzam, has authorized real estate financing companies to extend credit to clients through a “crowdfunding” mechanism. Under this system, multiple companies can jointly participate in financing clients seeking to purchase high-value properties, provided that each participating firm strictly adheres to all governing rules and regulations for real estate financing.

  Dr. Rehab Taha, Assistant to FRA Chairman, addressed an official letter to the Egyptian Real Estate Finance Federation approving crowdfunding operations following a formal request from the Federation. The request cited sector challenges facing both companies and market participants—most notably rising unit prices, limited capital bases for certain firms and constrained lending capacities relative to their statutory capital limits.

  FRA outlined several key mandates that real estate financing companies must follow when engaging in crowdfunding mechanism. In this respect, each company must independently adhere to core lending rules for individuals and institutions under Real Estate Finance Law No. 148 of 2001, its executive regulations, and FRA resolutions. Furthermore, each lender must individually meet financial solvency standards outlined in FRA Board Resolution No. 158 of 2020.

  Moreover, participating lenders must execute real estate financing agreements using standard contract templates issued by FRA, duplicating co-lender data fields within the template where applicable. Companies must ensure they do not individually breach statutory concentration limits for residential financing to natural persons, nor statutory limits for non-residential financing to natural or legal entities.

  Under FRA Board Resolution No. 111 of 2015, financing granted to natural persons for residential purposes may not exceed 90% of the property’s value—with the exception of leasing arrangements (ijara), which are permitted up to 100%. Total financing extended to a single investor, their spouse and minor children is capped at 15% of the company’s capital base, while monthly installments cannot exceed 50% of the investor’s income.

  For non-residential purposes, the resolution caps financing at 80% of property value and limits exposure to a single investor to a maximum of 30% of the company’s capital base.

  Dr. Islam Azzam, FRA Chairman affirmed that the Authority remains dedicated to ongoing dialogue with non-banking financial federations to stay attuned to market shifts and emerging trends. He stressed that FRA aims to maintain a delicate balance between fostering industry growth, ensuring market stability, protecting consumer rights and maintaining strict compliance with legislative frameworks.

  FRA Chairman noted that approving real estate crowdfunding directly addresses challenges related to price inflation, reduced competitiveness and restricted financing avenues for certain corporate and retail segments. He reiterated that these transactions remain fully governed by established legal frameworks, mandating absolute compliance with solvency and regulatory standards.

  Notably, statistics for the first quarter of 2026 revealed a drop of over 21% in the number of new real estate finance clients, alongside a 17.5% increase in total financing value compared to the same period in 2025. Residential units accounted for approximately 78% of the total funds granted.

FRA Q2 2026 Report: Investment Fund Net Assets Surge 14.7% – Tuesday 28 July 2026

• Net assets hit EGP 471 Billion as fund count rises to 224
• Outstanding fund shares reach 44 Billion, with retail investors holding 75%
• Sectoral and thematic funds lead Q2 average returns at 18.8%

Financial Regulatory Authority (FRA) has issued its quarterly investment funds performance report, tracking market developments through the end of the second quarter of 2026. The report demonstrates sustained growth in total assets, the number of funds and the investor base, reflecting the expanding role of investment funds as a key investment instrument in the Egyptian market.

In this report, FRA updated its classification of funds by type and count in alignment with the Egyptian Investment Management Association (EIMA). This updated framework revealed that the total number of funds across various issuances reached 224 by the end of June 2026, supported by the recent launch of 15 new investment funds in the market.

The report indicated that the total net assets of investment funds reached EGP 470.9 billion by the end of June 2026, up from EGP 410.69 billion at the end of March – representing an increase of EGP 60.28 billion and a growth rate of approximately.

Local currency-denominated assets reached EGP 444.56 billion, while foreign currency-denominated assets totaled the equivalent of EGP 26.41 billion, reflecting the continued diversification of fund portfolios.

Total Assets Under Management (AUM) also rose to approximately EGP 479 billion by the end of June, compared to EGP 419.5 billion at the end of the first quarter—a growth rate of about 13.96%.

Additionally, the total number of investment fund units continued to reach record levels, hitting 44.04 billion units by the end of June, up from 31.42 billion units at the end of March, marking a growth rate of approximately 40.16% over the three-month period.

According to the report, retail investors held the dominant share of investment fund units at 32.9 billion (74.7%), compared to 10.72 billion (24.3%) held by corporate entities, with founding entity reserves accounting for the remaining 1%.

Regarding investment performance, the report highlighted close average returns between Sector Funds (which concentrate capital in a single sector) and Thematic Funds (which focus on specific companies within sectors such as IT, fintech, and innovation), averaging 18.82% and 18.78%, respectively. These were followed by Index Funds with an average return of 18.35%, Equity Funds at 17.45%, Islamic Equity Funds at 16.37%, and Exchange-Traded Funds (ETFs) with an average return of 16.13% during Q2 2026.

The report underscores the sustained growth in investment fund assets, the expanding number of funds and units and the rollout of new investment vehicles. These developments are propelled by the Financial Regulatory Authority’s efforts to deepen non-banking financial markets, provide diverse investment instruments tailored to various investor segments and boost the overall appeal of the Egyptian capital market.

To view the full report, please click the link below:

[Investment Funds Performance Report – Q2 2026]