الهيئة العامة للرقابة المالية

The Financial Regulatory Authority, under the leadership of Dr. Mohamed Farid Saleh, is adopting objectives and policies that enhance market stability, transaction integrity and protect the rights of all participants. This is achieved through a supportive business environment, adaptable regulations and comprehensive solutions, all aimed at fostering company growth and development.

To achieve these objectives, FRA Board of Directors issued Decree No. (46) of 2025, actively enhancing listing and delisting rules to attract growth-oriented companies and bolster the non-bank financial sector’s contribution to the national economy. This decree introduces flexible SPAC provisions, simplifies SME shareholder entry to the main market, establishes voluntary delisting regulations, amends rules for listed company acquisitions, defines stock split criteria, clarifies asset handling and regulates remuneration and incentive systems.

The following is a review of all amendments introduced by FRA decree No. (46) of 2025 regarding listing and delisting rules on the Egyptian Stock Exchange:

First: Amendments to Listing and Delisting Rules for Special Purpose Acquisition Companies (SPACs).

(Q) What key changes were introduced to listing rules for Special Purpose Acquisition Company (SPAC) shares?

(A) The amendments now permit SPAC share listings in foreign currencies, provided the company’s capital is denominated in those currencies. Furthermore, the definition of ‘qualified investors’ and ‘financial institutions’ has been clarified, aligning with FRA Board of Directors’ Decree No. 177 of 2024 (replacing Decree No. 53 of 2018).

Additionally, the decree expands acquisition methods to include mergers, alongside existing share swaps and credit balance acquisitions, thereby offering SPACs a wider range of strategic options to achieve their objectives.

(Q) Does the 100% retention ratio apply to the founders’ shares in Special Purpose Acquisition Companies (SPACs) in the case of a cash increase?

(A) Yes, the 100% retention requirement applies to the SPAC founders’ original capital shares for two fiscal years. It also extends to shares from any subsequent cash capital increase if the founders subscribe. If they don’t subscribe, their retention ratio decreases. This ensures stable founder ownership.

(Q) Do SPAC shares trade at fair value post-acquisition and capital increase?

(A) Yes, shares subscribed to in a SPAC’s capital increase can trade at the subscription (fair) price, exceeding the nominal value. After the acquisition and capital increase are finalized, the company is required to publish a disclosure report according to Article 138 of Law 159/1981.

What are the key regulatory changes impacting public investor participation in SPAC share trading?

(A) The listing rule amendments have streamlined SPAC share trading for public investors. Trading is now permitted post-acquisition, following the publication of a prospectus or information memorandum and provided the company meets minimum shareholder and free float requirements. Additionally, the company must publish compliant six-month financial statements.

(Q) Do these amendments result in a faster timeline for public trading of SPAC shares?

(A) Yes, the amendments significantly reduce the timeframe for public trading of SPAC shares. Trading is now authorized following the release of six-month financial statements post-acquisition, replacing the previous requirement for two years of audited annual financials. This is contingent upon meeting specified net profit and shareholder equity thresholds within the six-month reports. The aim is to facilitate the entry of these types of companies’ shares for trading on the market and to determine their price based on supply and demand forces.

(Q) Do the amendments introduce changes to share retention requirements?

(A) Yes, the amendments mandate a 51% share retention for SPAC founders and board members, as well as board members and managers of acquired companies who subscribe to a SPAC capital increase in exchange for their shares. This allows other subscribers to freely dispose of their shares, providing an exit mechanism for acquired company shareholders and encouraging them to participate in SPAC acquisitions.

(Q) What incentives do the amendments offer to encourage SMEs to list on the main market rather than the SME market?

(A) The amendments offer SME founders, major shareholders and their successors an advantage in maintaining stable ownership. They are exempt from the three-year share retention requirement upon transferring to the main market. This incentivizes major shareholders to expedite the transition from the SME market to the main market if they seek an exit.

(Q)What measures were implemented to ensure a more controlled voluntary delisting process?

(A) The amendments protect investors by setting a 25-working-day maximum for final delisting and share purchases from affected shareholders after the general assembly’s resolution. This guarantees timely compensation and allows for daily share purchases, adhering to exchange rules.

(Q) How do the revised voluntary delisting rules manage potential conflicts of interest between principal investors and minority shareholders?

(A) The amendments introduce a dual approval mechanism for voluntary delisting by a controlling shareholder, requiring 75% of total general assembly approval and a majority (50% + 1) vote from minority shareholders.

(Q) What is the purpose of amending the voluntary delisting rules when a controlling shareholder seeks delisting?

(A) The amendments to the voluntary delisting rules aim to align with international best practices, ensure inclusive voting and prevent preferential treatment, thereby fostering equitable treatment for all stakeholders, subject to the Authority’s verification of controlling influence.

(Q) What are the new procedures for voluntary delisting?

(A) Companies must submit delisting documentation to the Exchange within five working days of the general assembly’s resolution. The delisting process concludes within 20 working days of complete documentation submission. Daily share buybacks are permitted, adhering to Exchange regulations.

(Q) How do the amendments change the Board’s role in voluntary delisting after a controlling shareholder acquires over 75%?

(A) In these cases, the amendments transfer voluntary delisting authority from the Board to the general assembly, ensuring fairness, equal treatment, and balanced decision-making, while protecting minority and free float shareholder rights without infringing on the controlling shareholder’s rights.

(Q) Do the amendments regulate mergers where an unlisted company’s value exceeds the listed company’s market cap?

(A) Yes, The amendments mandate specific requirements for mergers where an unlisted company’s net asset value exceeds the listed company’s market cap, similar to share swap or credit balance acquisitions. Post-merger, listed companies must publish a disclosure report, meet listing and fair value criteria and enforce a one-year stable ownership period for merger-related capital increase subscribers. These measures protect stakeholders and prevent listed companies from being used as exit vehicles for unlisted entities.

(Q) What criteria does the Authority use to approve stock split disclosure reports?

(A) The listing rules have introduced quantitative and qualitative criteria for publishing disclosure reports for the purpose of adjusting the par value through splits. This is based on a study prepared by the Authority when issuing its decision to publish the disclosure report for proceeding with the procedures for convening an extraordinary general assembly. The amendments to the listing rules aim to prevent manipulation during trading and the exploitation of company stock split news as material information to influence the company’s stock price on the Exchange without a real justification.

(Q) What changes have been made to asset disposal rules for listed companies?

(A) The amendments expand asset disposal controls to include listed companies’ sales of shares in other listed companies, previously limited to unlisted shares. Additionally, asset valuations for disposal must now be based on consolidated financial statements, if available, clarifying the previous ambiguity regarding separate or consolidated statements. These changes enhance shareholder protection.

(Q) Are there supplementary regulations governing the disposal of assets held by companies?

(A) Yes, the revised listing rules have streamlined the process for asset disposals. Now, the appropriate valuation expert is clearly defined: a financial advisor for shares, a real estate appraiser for property and a machinery/equipment appraiser for those assets. This eliminates previous ambiguity about who should conduct the valuations.

(Q) What is the reason for the changes to disclosure reports for approving remuneration plans?

(A) The amendments aim to simplify and centralize the approval process. By placing the Financial Regulatory Authority (FRA) the sole approving entity (instead of the Exchange).  As the Authority approves remuneration and incentive systems, it will now verify disclosure requirements before general assembly meetings, simplifying the process for companies.

(Q) What are the time limits for submitting disclosure reports and holding general meetings for capital changes, business amendments, par value changes and incentive plan approvals?

(A) The updated rules establish clear timelines. Companies must submit disclosure reports to FRA within two business days. Following FRA approval and publication, companies are required to convene the general assembly within one week to approve the relevant action.