FRA Tightens EGX Listing Rules to Boost Governance & Protect Investors

Egypt’s Financial Regulatory Authority has introduced amendments to listing and delisting rules aimed at reinforcing governance, transparency and investor protection on the Egyptian Exchange.

The package introduces cumulative voting for board elections and establishes an electronic register of insiders and shareholders holding 20% or more of a company’s shares. Companies will also be required to issue advance blackout notifications around material events.

Voluntary delistings will now require approval from minority shareholders through a majority-of-minority vote at general assemblies. Retention requirements have also been revised: shareholders holding 10% or more must commit that their combined ownership will not fall below 51%, reduced from the previous 75%, and not less than 25% of total shares for two years following an initial public offering.

Listed companies must disclose board performance evaluations in annual reports and notify the regulator before changing external auditors, providing justifications and a formal handover plan. Firms are also required to maintain adequate electronic financial and accounting systems subject to on-site verification.

To broaden access for newly established companies, the FRA introduced separate listing criteria. These include a minimum free float of 10%, at least 300 shareholders, no fewer than 20 million shares, and a fair value study supported by a forward-looking feasibility assessment.

The EGX Listing Committee may postpone delistings in breach cases if a purchase offer is presented that commits to maintaining the listing and includes a fair value study and business plan.

Listed companies are required to establish a Nominations and Remuneration Committee composed of non-executive directors and chaired by an independent member. They must also clearly disclose dividend policies and auditor fees.

Companies have a three-month grace period to comply with the new framework, with extensions subject to regulatory approval.