Listing in the EGX

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Initial Public Offering (IPO)

If you already established you may submit and Initial Public Offering (IPO) to the Egyptian Stock Exchange (EGX)

There are Two offerings:

Public Offering
Private Offering

The governing laws:

Companies Law No. 159 of 1981: This foundational law outlines the regulatory framework for the incorporation, management, and dissolution of companies in Egypt, including governance aspects like shareholder rights and board responsibilities.
EGX Listing Rules: Issued by Stock Exchange for companies listed on the EGX. These rules demand adherence to stringent governance standards, focusing on transparency, accountability, and shareholder rights.
Capital Markets Law No. 95 of 1992: The law outlines the reporting requirements and rules for corporate entities listed in the stock exchange and any other entities incorporated under that particular law.
Banking Law No. 88 of 2003 "For Banks": This law governs banking institutions, emphasizing robust governance structures for risk management and operational integrity.

The required documents for Public Offering:

A public subscription approved by Egyptian Financial Supervisory Authority (EFSA)
The shareholders' resolution with special majority
Fair value report issued by approved financial adviser.
Issuance of a subscription prospectus which should be published in a daily newspaper

Steps for Public Offering:

The IPO is a bit complex process,

Appointing advisers (Investment banks/underwriters, solicitors and the auditors’ broker and financial advisers). Advisors, need to be licensed by EFSA.
The minimum issued capital for a company entering into the IPO process in the primary market is EGP 1,000,000, and the authorised capital must be maximum five times the issued capital and the founders obtain, at a minimum, 50 percent of the shares (according to CMA law).
Initial approvals receipt by EFSA.
Listing on the EGX takes place after the completion of the IPO procedures that lead to meeting the listing requirements.

Listing an existing entity in EGX

Listing shares on EGX should have the following rules:

Some initial listing requirements are as follows:

At least Five million shares with at least an amount of EGP 50 million Egyptian pounds as fully paid up capital.
The number of shareholders should be at least three hundred and a minimum of 5 percent free float of its share capital.
In addition, ongoing compliance should be adhered to.
The responsibility of following up continually on the listing requirements is for the Listing Committee.

Private Offering

It is needed by individuals or corporate firms, which should be qualified investors (should have financial criteria or experience related to securities market.).
The private offering doesn’t require the issuance of a subscription prospectus which should be published in a daily newspaper, which required by the IPO.
Information memorandum is to be submitted and its contents have less detailed information compared to an IPO prospectus.

Trade in securities

Listed shares It is managed by EGX and it is the responsibility of the listing committee to look after the revision, verification and approvals of the applications for listing According to the rules of CMA law, if the public offering is issued in the primary market only, the shares are issued by the company either through establishment or through the increasing of capital. Practically there is a precedent in the Egyptian market for public offering of unlisted shares in the secondary market.
Listed or non-listed shares are monitored by EGX ,the licenced member firm only has the right to issue orders on the EGX and, through its rules, trades may carried out through protected transactions under the rules and procedures of EGX which are approved by EFSA.
The chairperson of EGX has the right to transfer any cases to the Trading Committee for the decision of giving protection; examples of these cases are connected party deals and banks exercising a pledge or affiliated and subsidiary companies.

Dual-Secondary listings

Foreign securities could have a dual primary listing in Egypt: listing on a recognised exchange and fulfilling the requirements for eligibility as mentioned above; in addition, foreign exchange should be under the supervision of the authority which similar to the authorities of the EFSA.
For the Egyptian issued depository receipts for offshore issuers could be registered which common in practice