Financial Regulatory Authority launches short selling framework in Egypt

The Financial Regulatory Authority (FRA) has issued a new regulatory framework, Decision No. 155 of 2026, to govern short selling operations in Egypt. This move follows extensive discussions with the Egyptian Exchange, Misr for Central Clearing, Depository and Registry (MCDR), and various brokerage firms to address previous practical challenges.

The new framework aims to increase market liquidity, improve pricing efficiency, and deepen the capital market. A central component is the establishment of a ‘Central Lending System’ managed by MCDR. This system will allow short sellers to view available lending offers from lenders, ensuring transparency and governance by documenting all stages of the process, including quantities, lending periods, and rates.

FRA Chairman Islam Azzam stated that the regulation seeks to balance market encouragement with strict risk control and market stability. This development follows the launch of the derivatives market in March and the recent regulation of hedge funds, marking a significant step in modernizing Egypt's capital market tools to align with international practices.