Egypt: Egypt Sets 50 Percent Cash Collateral Limit in New Rules for Short Selling

What the report says

Egypt has introduced a new framework for short selling on the Egyptian Exchange, according to Daba Finance’s report distributed by AllAfrica. The rules were approved by the Financial Regulatory Authority under Resolution No. 155 of 2026 and are intended to broaden trading activity and add new investment tools to the market.

Under the framework, investors must post cash collateral equal to at least 50% of the market value of the securities they borrow. The report said Misr for Central Clearing, Depository and Registry will hold the sale proceeds, and brokers must collect the extra collateral before a trade is completed. That structure gives the position an initial coverage level of 150% of the borrowed shares’ value, while daily revaluation is meant to keep collateral aligned with price changes.

The article said the central lending platform will link the exchange, brokers and custodians, recording trades and monitoring limits. Proceeds from short sales will be placed in approved fixed-income or other instruments until the position is closed, and lenders will receive fees while retaining dividend and other rights tied to the shares.

The rules also set position caps, including limits on the total share float that may be shorted and on how much a single investor or related parties may borrow. The report said brokers need minimum equity and capital requirements to offer the service. More broadly, the change gives Egypt’s market a tool that can support liquidity and allow investors to express negative views on stocks, alongside other reforms in market infrastructure.