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An Explanatory Statement related to what has been tackled in the media regarding some experts and officials’ declarations on suggesting New Trading Mechanisms and the Date of its Application - Wednesday 28/3/2012

Referring to what has been tackled in media and websites regarding some declarations made by some employees and officials at some organizations and companies in the capital market field; that EFSA will apply new trading mechanisms and the date of its application, EFSA would like to highlig ht on the following:

First: According to the legislations regulating Capital Market, especially, Law no. 10 of 2009 for Regulating Non-Banking Financial Markets and Instruments, EFSA is maintaining the integrity and stability of the market. EFSA regulates the market and it is interested in developing it and protecting the rights of its dealers. In addition , EFSA provides all the means and systems that ensures the efficiency and transparency of the market and it issues the rules related to this. EFSA has the right to set and approve the rules regulating financial instruments. Also, it set the rules and regulations needed for granting licenses to practice market’s activities. It can suggest and approve new trading mechanisms.

Second: Any new trading mechanism or rule shall has the legal frame, rules and regulations which define the technical basis for such mechanism as well as the scope of responsibility of the body which will implement it. It shall include the rights and obligations of its dealers. EFSA’s BOD shall approve these rules. EFSA is interested in verifying the fact that such rules being set by the competent body are compatible with the best international practices in this regard. Also, EFSA is keen on negotiating with the market parties regarding the technical basis as often as necessary and depending on the circumstances.

Third: Before applying any new trading mechanism, EFSA verifies the availability of the technical systems and programs- needed to activate the new mechanism- at the Egyptain Exchange, Misr for Central Clearing, Depositary and Registry and companies operating in securities. Also, EFSA sets the systems and programs that regulate the implementation of the new mechanism.

Fourth: EFSA ensures the fact that the application of the new mechanism will not increase the risks which may affect the stability of the market, the activities of its institutions and the benefits of its dealers. Also, EFSA is keen on providing all means that protect dealers from these new mechanisms.

Fifth: EFSA will set the date which it may consider appropriate - to consult the concerned parties- regarding activating any new mechanism in accordance with market’s conditions and needs and depending on the actual willingness of the competent parties to apply these rules .EFSA will announce the date on its website www.EFSA.gov.eg and in the media for all and at the same time. EFSA will grant the companies a sufficient period prior to applying the mechanism in order to know these new mechanisms, provide the needed requirements for its clients, obtain the approval from EFSA regarding this issue, conduct tests for employees and grant the needed licenses.

Sixth: EFSA calls upon all market’s parties to abide by the priorities of application related to the market and all the mentioned considerations which govern the application of any trading mechanism in a way that grants the stability of transactions in the market.

Finally, EFSA asserts that it welcomes any inquires or suggestions from all parties in the market and the media regarding the current trading mechanisms and the date of its application.