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EGX Studies The Requirements For Establishing Commodities & Futures Exchange With International Commodities Exchanges

Mr. Mohamed Farid, Chairman EGX, met with officials of a number of specialized exchanges in the circulation of commodities and contracts on the sidelines of the annual conference of the WFE in Bangkok.

The bilateral meetings included officials from NASDAQ, Johannesburg, Moscow and India exchanges, as well as representatives of both Chinese exchanges Dalian and Zhengzhou, which specialize in commodities and contracts only.

Farid explained that during the meetings, a clarification was made about the requirements for  establishing stock exchanges specialized in trading of  financial instruments or commodities, and the importance of existence of commodity settlement for contracts, like for example ,the existence delivery depositories for goods traded on the market.

On the other hand, a discussion was made about the types of contracts that can be traded on various types of goods, ranging from general contracts without specific depositories for delivery of commodities, to the contracts where the goods have specific delivery places ,and also the determination of goods that can be are traded, the maturity and value dates , the primary price and other technical matters. As well as the technological structure required for the development of such contracts, where  the most important of which is how to obtain prices of goods in the current market for trading, on which the future price stipulated in the contracts.

On a related level, EGX Chairman discussed during the meetings the mechanisms to raise the efficiency and capabilities of employees in the specialized fields that organizes the future trading on contracts or options contracts in preparation for establishing a regulated market for such trades in Egypt.

Noting that there are proposed amendments to the Egyptian Capital Market Law and that these amendments will establish the legislative and regulatory framework for the Egyptian contracts exchanges and markets. The proposed legislation also allows for the large circulation of contracts based on financial instruments such as shares, bonds, agricultural commodities and other identifiable goods.

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