Egypt bourse to move to next-day settlement on June 11: Regulator

Reuters , Thursday 4 Jun 2015

The Egyptian stock exchange
File photo: Traders work at the Egyptian stock exchange in Cairo (Photo: Reuters)

Egypt's stock exchange will move to next-day settlement of trades on June 11 in a move aimed at increasing activity and liquidity, the securities regulator said on Thursday.

At present, the market operates under second-day settlement. The change could increase trading activity by making money flow faster, and by shortening the time that trades are unsettled, reducing counterparty risks.

"Next-day settlement will start next Thursday and will help create new liquidity as well as help investors better manage risk," Sherif Sami, head of the securities regulator, told Reuters.

Next-day settlement will be optional for investors in Egypt's bourse, Sami said, adding that it would apply to all stocks and exchange-traded funds available on the market.

"Using next-day settlement when selling a stock will only be available through the same brokerage the stock was bought through...and brokerages will not be able to use next-day settlement without orders from clients," Sami said.

Next-day settlement will be the second major reform to the market this year. Egypt approved the use of exchange-traded funds in January. 

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