Egyptian Parliament Approves Amendments to Capital Markets Law, Opens the Door for Sukuk Issuance

On 13 February 2018, the Egyptian Parliament approved the most comprehensive amendments to the Capital Markets Law No. 95 of 1992 since its enactment.

The amendments establish a legislative framework for Sukuk issuance and trading in Egypt, authorize the establishment of an exchange for regulated trading in derivatives, including futures, options and swaps, abolishes bearer securities and expands the scope of the criminal provisions in the Capital Markets Law. The amendments will only have a limited impact on the process of securities offerings in Egypt. The amendments are yet to be signed into law by the President and will take effect after their publication in the Official Gazette.

The amendments follow a series of legislative reforms aimed at promoting foreign investment in Egypt, such as the enactment of a new investment law in 2017 and a new bankruptcy law in 2018. It is hoped that the amendments will boost activity in the Egyptian capital markets. The period following the floating of the Egyptian pound in November 2016 has seen a number of successful IPOs in Egypt, with several more IPOs in the pipeline, fueled mainly by the IPO program of the state-owned companies.    

This memorandum provides a summary of key provisions of the amendments, including their effect on securities offerings and trading in Egypt.