الهيئة العامة للرقابة المالية

• Mohamed Farid – FRA’s Chairman: Digitalization of GDRs goes hand-in-hand with the Authority’s vision to accelerate digital transformation in order to expand financial and investment inclusion.
• Ahmed El-Shiekh – EGX Chairman: The official launch of this new digital system marks a significant shift in streamlining GDRs trading, thus enhancing liquidity in the market

Dr. Mohamed Farid – FRA’s Chairman and Ahmed El-Sheikh – EGX Chairman launch the first phase of a comprehensive project aimed at digitalizing the Global Deposit Receipts (GDR) system.

The launch was attended by important figures, including Amr El-Ganainy- Deputy CEO and Executive Director of Commercial International Bank (CIB) and leaders from FRA, the Stock Exchange, and representatives from companies engaged in GDR systems.

The Egyptian Exchange’s Information Technology Sector successfully finished the first stage of a project to develop and digitize (GDRs) system. The first phase of the project involves developing an electronic system and digital platform for registering and managing the transfer of local stocks into GDRs. This digital integration establishes direct electronic links with all stakeholders, agents, custodians, and Misr Clearing Company for Central clearing ,  Depository and Registry (MCDR).

Dr. Farid believes that digitization of non-bank financial transactions is a priority for the Authority.  He adds that this push towards digitization aims to achieve financial inclusion, develop and improve trading mechanisms.

Dr. Farid emphasizes that digitizing non-bank financial transactions aligns with the Egyptian government’s bigger goal. The government is working to expand access to these services aiming at empowering them to invest, get financing and secure insurance, ultimately improving their overall well-being.

Moreover, Dr. Farid highlights that fintech makes it easier for people to access these services and use them on a regular basis across various sectors. This essentially means more people can benefit from these services in the long run.

Dr. Farid mentions that to implement Law No. 5 of 2022 on regulating and developing the use of fintech in non-bank financial activities and services, FRA issued three specific executive decisions.

These decisions are as follows:

• Decision No. 139 of 2023 focusing on the technical infrastructure needed for secure and reliable non-bank financial services.
• Decision No. 140 of 2023 dealing with digital identity verification, digital contracts, and electronic recordkeeping, ensuring secure and transparent transactions.
• Decision No. 141 of 2023 on establishing a registry of qualified outsourcing service providers.

Ahmed Elsheikh – EGX Chairman states that this initiative is being implemented in line with item (32) of EGX Development Strategy issued in January focusing on improving trading rules and mechanisms.

Elsheikh says: “Today marks the end of an era: We’re officially launching a brand new digital system. This replaces the outdated email-based system that’s been used for GDR during the past three decades.”

Applying this new digital system shall improve tracking as Brokerage firms can now easily track the status of their requests. In addition, the new system ditches the manual delivery of documents and requests through email or physical means. This streamlines the process and saves time and increases their overall liquidity in the market.

Also, he points out that the new system is designed to be adaptable and can be easily expanded upon with new features in the future. He adds that currently, EGX is working together with  MCDR to ensure the following:

• Electronic submission of GDR conversion order through the new system. This eliminates the need for physical paperwork.
• Approve conversion requests electronically and send them directly to MCDR through the new system.

Amr El-Ganainy- Deputy CEO and Executive Director of Commercial International Bank (CIB) praised the efforts exerted by FRA and EGX to develop securities trading mechanisms.  He adds that focusing on technological advancements is evident with the digitization of GDR through this new electronic system and digital platform, noting that prior to this step codes were registered and issued electronically, aligning with FRA’s broader digitalization push for non-bank financial transactions. This initiative encompasses digital identity, digital contracts, and digital records.

He adds that developing trading mechanisms is a key foundation for expanding access to financial services, investments, and insurance in the coming years.

GDRs are powerful tools for Egyptian securities institutions and international investment funds. They allow these entities to diversify investment options for all categories of investors, especially foreign investors.

The new electronic system streamlines the process of offering local Egyptian securities on international markets. This is achieved by simplifying listing and trading of Global Depositary Receipts (GDRs) on international exchanges through the new digital system.