The Capital Market Authority (CMA) will introduce new amendments related to mutual fund activities into the executive regulations of the capital market law within the next two weeks.
The new amendments are due to be enforced by the end of the year after being presented to market participants for discussion and their approval by the competent authorities.
According to Alaa Amer, deputy chairman of CMA who supervises an ad hoc committee for the new amendments, these amendments are intended to encourage the expansion of mutual funds in the Egyptian market by increasing the number and branches of activity.
The most important clause that will be amended is that which restricts setting up mutual funds to banks and insurance operators. This will be replaced with another provision to allow other companies to launch mutual funds. The area of business for real estate investment funds will be expanded to ownership and management of real estate assets instead of only trading in shares of real estate companies in the stock exchange. The CMA will also introduce special regulations for private equity funds.
Amer, however, explained that the new amendments will not include clauses that regulate mutual funds activities under the law no. 95.
“For these clauses are only broad guidelines that should be supported with more detailed regulations, he said, noting that at present the market needs urgent intervention to handle several issues related to investment in mutual funds.
He pointed out that propelling mutual funds’ activity will tackle, to a great extent, the phenomenon of individual domination on the stock market trading, as retail investors currently make up 70 percent of the market against only 30 percent for institutional investors. Noozz
