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 About CMA |
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The Capital Market Authority is the government agency responsible for regulating Egypt's securities markets. The Authority's primary mandates are to protect investors and to encourage the development of efficient, orderly, and well-regulated primary and secondary markets for securities.
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CMA Mandates
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Enforces the Capital Market Law (95/1992), its Executive Regulations,
and related decisions, the Depository and Central Registry Law
(93/2000) and its Executive Regulations and listing and delisiting
rules at CASE.
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Authorizes prospectuses of new securities issues.
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Reviews information memoranda of securities private placements.
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Granting license for securities companies.
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Protects rights of minority shareholders.
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Applies disclosure requirements in accordance with Egyptian Accounting
Standards based on International Accounting Standards.
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Conducts market surveillance to ensure transparent and fair trading in
securities and to deter fraud, including reviewing disclosures from
listed companies, monitoring securities trading, and inspecting
brokers and other intermediaries.
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Facilitates the growth and development of Egypt's capital market,
including improving the skills of capital market officials,
encouraging the introduction of new financial instruments,
facilitating the implementation of state-of-the-art technology, and
increasing investor awareness.
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CMA's Major Goals
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Protecting investors from non-commercial risks.
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Organizing and developing capital markets and keeping its integrity.
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Applying fairness and transparency principles.
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CMA Development
Formed in the late-nineteenth and early twentieth centuries, Egypt's stock exchanges are among the oldest in the world. They were also among the most active until the 1960s, when the nationalization program caused trading in stocks and bonds to lie dormant. The exchanges reemerged with the economic restructuring program of the last decade of the twentieth century.
While it was founded in 1979 by Presidential Decree Number 520, the Capital Market Authority did not take on its full importance until the 1990s. During that period, its main role was to facilitate the reemergence of Egypt's capital markets by providing leadership to market institutions, educating potential investors, and strengthening the legal, regulatory, and operational infrastructure. At the same time, Egypt's economic restructuring program, in particular privatization of state-owned companies, accelerated the growth of the market. As a result of these efforts, market capitalization grew exponentially, from L.E. 5 billion in 1990 to L.E. 815 billion in 30/6/2008.
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Future Plans
The Capital Market Authority continues to lead the development of a more
robust infrastructure, reducing risks to investors and increasing their
confidence in Egypt's securities markets. Priorities of the CMA in the
coming period can be divided into three programs:
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Capacity Building Program: to boost efficiency of CMA surveillance
performance and the regulatory framework.
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Intermediaries Support Program.
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Capital Market Infrastructure Development Program.
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The Achievements
Major Landmarks and Developments in Egypt's Capital Market
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| 1992 |
Passage of the Capital Market Law (95/1992) |
| 1993 |
Major Landmarks in the Reemergence of Egypt's Capital Market |
| 1995 |
Implementation of the first electronic trading system |
| 1996 |
Creation of Misr for Clearing, Settlement, and Central Depository |
| 1997 |
Implementation of the central depository system, ensuring settlement on the third business day after the trade date (T+3) |
| 1999 |
Introduction of rating agencies for corporate bond issues |
| 2000 |
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Launch of the Settlement Guarantee Fund
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Passage of the Central Securities Depository and Registry Law (93/2000)
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Introduction of dealers in government and corporate fixed-income
securities
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| 2001 |
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Launch of a new electronic trading system at the stock exchange
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Establishment of a system guaranteeing the repatriation of proceeds by
foreign investors within four days of the trade date (T+4)
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Promulgation of the Executive Regulations to Law 93/2000
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Introduction of errors and omission and professional liability
insurance for securities intermediaries
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| 2002 |
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Creation of bank custodians and sub-custodians
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Issuing new rules of margin trading
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| 2003 |
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The Issuance of Money Laundry Combating for market participants
companies.
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Applying securities ISIN Codes for securities trading.
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Participating in the Corporate Governance Global Forum (France
November 2003).
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Implementation of the central depository system, ensuring settlement
on the second business day after the trade date (T+2).
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| 2004 |
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Introducing Securitization Chapter to the Capital Market Law.
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In February 2004, Egypt has been removed from the FATF Anti-Money
Laundering Non-Cooperative Countries’ list (NCCTs).
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Launching the CMA strategic plan (2004-2008).
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Implementation of the central depository system, ensuring settlement
for bonds on the first business day after the trade date (T+1), and
activating the role of primary dealers.
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The issuance of the membership rules of CASE.
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The Capital Market Authority celebrated its 25th anniversary last
February (The 25th Anniversary Achievements Brochure)
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| 2005 |
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Issuing of rules of Same Day Trading.
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Issuing of new rules of margin trading and Short
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Selling.
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Issuing of Code of Ethics for securities companies staff.
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Activating of Investor Protection Fund.
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Approval on the first issue of securitization bonds.
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Reactivating of state asset management program.
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| 2006 |
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Developing CMA organization structure according to international best
practices and launching of Capacity Building Program.
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Moving the CMA to its new head office at the Smart Village.
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Issuing new membership rules at CASE.
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Issuing of regulations combating price manipulation and insider
trading.
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Issuing new requirements of securities companies establishment and
licensing.
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Issuing rules of On-Line Trading.
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Maintaining a mechanism of qualification and licensing of securities
companies staff.
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Amending of the Egyptian Accounting Standards according to IFRS to
replace existing ones.
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Launching of the largest investors awareness program, including:
Advertisement campaign in the radio and television.
Establishment of CMA Call Center.
Launching of a new website for the CMA.
Launching a specialized website: Investor Awareness
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| 2007 |
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Issuing Code of Ethics of Accountants and Auditors Listed at CMA
Register.
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Issuing a manual for applying rules of unlisted securities corporate
governance .
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Issuing Standards of licensing for employees in securities companies.
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Issuing Capital adequacy rules for securities intermediaries.
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Issuing Bond Repurchasing Contracts and Agreements.
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Establishment of a register at the CMA to record Financial Consultants
and develop rules for the listing.
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New Accounting standards in accordance with IFRS.
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| 2008 |
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Establishment of The Quality Control Unit On The Auditors Registered
at The Capital Market Authority.
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Securitization regulations amendments.
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Issuing of Auditing standards.
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Development of the mutual funds regulations.
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Exchange Traded Funds & Market Makers.
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New website for investor education.
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NILEX – Stock Exchange for SMEs.
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Strategic Objectives
CMA Five-Year Plan 2008-2012
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CMA Vision:
The Capital Market Authority (CMA) is seeking to develop Egyptian capital markets to be more efficient and competitive for attracting and directing both local and foreign savings for investment in Egypt. This approach is achieved through the application of international standards and practices in leading and emerging capital markets, and so that the Egyptian capital market becomes a pioneer on the regional level among the Middle East and the Arab countries.
The CMA also endeavours to enhance its performance and boost its ability and efficiency according to the highest international practices through developing legislations, rules and systems of the CMA’s internal work. Effectiveness and the efficiency in the performance of its regulatory role are thus realized in order to facilitate and encourage investors and dealers in the stock markets to execute their transactions safely, efficiently and with lower costs.
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CMA Strategic Mission
The strategic mission of the Capital Market Authority is the protection of the investors, the development of the capital market, the preservation of its fairness, the limitation of market risks and application of principles of justice and transparency.
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Values
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Being so keen to achieve its missions and strategies, the CMA and its
staff are committed to the following values and principle
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Integrity: The CMA employees are committed to principles and
ethics that help to acquire and maintain confidence of dealers in CMA
service
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Fairness: The CMA role includes surveillance on the capital
market and enforcement of its regulating legislations and rules. The
CMA maintains fair treatment of all market participants in regards to
the application of legislations and rules with due respect,
seriousness and car
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Accountability: The CMA employees value the responsibility
placed on their shoulders for the verification of the CMA mission and
goals as they deem themselves responsible for achieving these
objectives before the investing public.
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-Resourcefulness & Efficiency: The CMA employees are
committed to the intensification of their efforts for defining and
evaluating of risks that the capital market, the investing public and
other market participants may be exposed to. Therefore, CMA employees
strive to seek means and up-to-date methods for achieving CMA mission
to protect investors, develop the capital market and realize its
targets by the highest possible degree of efficienc
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Teamwork: The CMA is fully aware that its success in the
performance of its tasks as a regulatory organization of the Egyptian
capital market requires cooperative staff that are dedicated to the
performance of CMA tasks with the highest levels of confidence, hard
work, cooperation and communication. CMA staff is committed to these
principles and exert highest effort for raising the performance
efficiency as an integrated team and not at the level of
administrations or separate divisions. Effective coordination is also
taking place with related business associations, institutions and
governmental organizations inside and outside Egyp
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Commitment to Excellence: The CMA requires from its staff to be
committed to the highest standards of fairness, seriousness, efficient
performance and loyalty in work, which is the least to be offered to
the public in the Egyptian capital market.
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Transparency: The CMA adheres to a distinguished style in
dealing with market participants, based on transparency of all legal
disclosure requirements as one of their rights in order to gain their
confidence and cooperation. And the CMA expects the same level of
transparency from those parties.
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Strategic Goals
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Development of the Regulatory Framework. On-going development of the
regulatory framework of the CMA to address ongoing and growing
challenges in the capital markets and its institutions.
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Developing medium and long term financing market for all enterprises
including small and medium ones .
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Raising public awareness. Encouraging and strengthening programs to
raise investor awareness of all aspects as well as that for all
parties in the financial community.
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CMA restructuring and capacity building. Ongoing development of the
CMA’s internal work systems so as to cope with market developments.
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Developing the capital market infrastructure. Effective and ongoing
development of the capital market infrastructure .
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Developing an active market for commodities and financial derivatives.
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Strategic Objectives
These strategic goals covers the period from 2008-2012 and will be
carried out consecutively, in accordance with the plans and Work
programs formulated by the annually CMA.
1. On-Going Development of Regulatory Programs:
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Developing legislations and legal regulations for the capital market
in connection with other economic legislations for the purpose of
increasing the efficiency of regulatory programs at CMA.
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Developing the programs of investigation and inspection on market
intermediaries.
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Developing the surveillance program.
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Developing the program of surveillance for the Securities Market
issues.
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Developing the procedures of surveillance of disclosure of related
companies intermediaries.
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Developing regulations and new procedures for inspection of SRO's.
2. Organizing & Providing Medium and Long Terms Financial Instruments:
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Evaluating international debt markets in order to develop an organized
market for debt in Egypt.
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Organizing securitization activities and having its included among the
activities of companies dealing in financial securities.
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Establishing a unit at CMA for licensing and monitoring debt issues.
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Encouraging the activity of developing and publishing indices related
to debt instruments.
3. Encourage and Strengthen Programs to Develop Investor's Awareness:
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Designing national program for developing investor awareness in
cooperation with other stakeholders and SRO's.
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Developing specialized training programs for journalists, media
community and judges in cooperation with SRO's.
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Participating in preparing circulars and specialized publications for
investors, issuers and financial entities in cooperation with SRO's.
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Conducting workshops or seminars 3 times annually, covering issues of
interest to members of the financial community (investors relations,
corporate governance, securitization, margin trading and bond
issuance).
4. Ongoing Development of the CMA's Internal Work Systems so as to cope
with Market Developments:
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Developing the organization and administrative structure of the CMA.
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The Continuity of implementing the plan of automating activities and
data base at the CMA.
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Preparing and issuing internal work manuals for staff of the CMA and
guides for others dealing with the CMA.
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Securing and furnishing an independent building for the CMA.
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Developing a training needs assessment for CMA staff and conducting
local and international training.
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Finalizing the preparation of a special study conducted on
establishing an Egyptian financial center in cooperation with the
Ministry of Investment.
5. Effective and Ongoing Development of the Capital Market
Infrastructure.
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Coordinating with the Ministry of Investment to establish a Directors
Center to train the Directors of companies on the principles of
corporate governance.
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Developing principles and procedures for organizing the
Over-The-Counter market.
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Studying derivatives that could be introduced to the Egyptian Market
and which would meet the needs of foreign investors.
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Conducting a study to identify necessary developments required to
introduce derivatives to the Egyptian Market (licenses - trading -
clearing and settlement - legislations). Other objectives to be added
based on the results of the study.
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