Egypt's House of Representatives (photo courtesy of Khaled Mashaal)
Parliament's deputy speaker Ahmed Saadeddin said the amended law will be up for a final vote in a later session.
Ahmed Samir, chairman of the House's Economic Affairs Committee, said the amendments were proposed by the Financial Regulatory Authority (FRA), with the objective of streamlining the performance of Egypt's capital market in line with international rules and criterion and making use of Egypt's current economic growth in all sectors at the same time.
"The law seeks to create new non-banking funding tools which can be used to contribute to fund projects aimed to improve the performance of public utilities and services," said Samir, adding that "one of the main strategic objectives of Egypt's economic growth is to develop the capital market, regulate its performance in a more competitive and transparent way, and diversify the investment tools and this, in general, will be of great benefit to the Egyptian economy."
"In brief, this law aims to provide the funding necessary to achieve greater economic growth and comprehensive development," said Samir, explaining that "projects under implementation will be allowed by this law to issue bonds on the capital market, the proceeds of which will be used to fund their operations, streamline performance and provide sustainable services."
The amendments encompassed six articles of the capital market law, the most important of which is Article 10 which was amended to state that companies whose shares are traded on the capital market will be forced to use electronic systems necessary to help owners of shares to attend general assembly meetings and vote on decisions taken online (article 10).
Those who violate this article will pay a fine of no less than EGP 20,000 and no more than EGP 100,000.
The amended article 41 also states that securitization companies will be allowed to issue bonds, the proceeds of which will be allocated to give funding to public and private entities after getting FRA's approval.
Soliman Wahdan, the parliamentary spokesperson of the liberal Wafd party, said the above amendments go in line with Article 27 of the constitution which states that Egypt's economic system is aimed to achieve prosperity through sustainable development. "The amendments of the capital market law clearly serve the objective of raising the living standard of citizens and achieving prosperity," said Wahdan.
Amr Darwish, MP affiliated with the parliamentary majority party of Mostaqbal Watan, said the amendments help create an economic climate more favourable to investors and businesses. "The amendments open new fields for private investors and national projects to tap the capital market to get finance and serve the Egyptian economy," said Darwish.
Hani Abaza, a Wafdist MP, said "the amendments make the capital market a more attractive source for spending on national projects which serve poor citizens and improve public utilities."
Meanwhile, the House also approved two foreign agreements. The first is an Egyptian-Swedish Cooperation Agreement, which offers a 10 million Swedish krone grant to improve the performance of Egypt's electricity grid. The second is an agreement with the European Bank for Reconstruction and Development, aiming to increase the sum of a financial grant by 210,000 euros, or from 555,343 euros to 765,343 Euros, to help the Egyptian National Railway Authority's purchase of 100 new train locomotives.
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