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Trading System  

The trading system at EGX has perceived gradual development from an outcry system (prior to 1992) to an automated order-driven system. As a result of the growth in business, the Exchange got hold of a proven and scalable system conforming to international standards and up to date technology.

In May 1998, EGX contracted with "efa", a Canadian software company (which was first bought by the Australian Computershare company and was recently acquired by the leading international technology provider "OMX"), to provide a new trading, clearing and settlement system. The trading component of this system started operations in May 2001, after applying a locally developed automated trading system for almost 9 years.

In its endeavor to keep abreast with the latest technological advancements, based on its vision to become the financial hub and investment gateway in the Middle East and North African (MENA) Region that best serves its stakeholders, EGX has upgraded its trading platform to OMX high performance "X-Stream" solution, and launched it on 27 November 2008, replacing the old trading system "EFA Horizon".

X-stream is designed to support the increasing volume of trading on EGX as well as the simultaneous trading multiple product classes including equities, debt, commodities, ETFs, futures and options in both an exchange traded and cash/OTC/derivatives environment. X-stream has the capacity to meet the future needs of EGX.

Moreover, EGX offers an in-house developed OPR program that deals with the IPO's and private placements before execution in the market. This program facilitates orders' registrations and cancellations, assures accurate calculations of the allocation percentages and enables the market to absorb efficiently the surge in the amount of placements.

Trading Procedures at EGX

How transactions or trades are carried out on EGX?

  • Before investors can trade listed or un-listed securities on the Egyptian Exchange (EGX), investors must open a trading account with one of the licensed members or brokerage firms by the Capital Market Authority. Investors can only buy or sell shares through licensed member firms. All investors must open accounts with custodians, which are mainly banks and few member firms, in order that EGX can check on line their outstanding balances prior to any sale transactions.
  • All members trading in listed or unlisted securities (stocks, bonds, close-ended mutual funds) on EGX must trade via EGX Trading System (CTS).
  • Members must record their customers’ orders immediately after receiving them. Recording includes the details of the order: order number, security name, client account number, quantity and exact time that the order was received etc.
  • Members must ensure that the securities being sold are available before execution of the orders and if members are buying securities, they must ensure that the necessary funds are available before the execution of the trade.
  • Trading starts with an order given by a client or customer to the member firm to buy (or sell) a specified number of shares of a given company at a specified price.
  • This order will be queued into EGX electronic trading system terminal either at EGX trading floor or the members’ premises. The order is then sent through the trading system to EGX central computers. An order confirmation is immediately routed back to the member firm.
The Cycle of Any Transaction
Client want to buy or sell a stock or bond
Consult and contact the brokerage firm
Formulate order,specify price,quantity and type of security to be purchased or sold
The brokerage firm contacts their floor broker, and give him the buy/sell order
At Time T
Order is processed through the stock exchange
At Time T
Misr For Clearing, Depository And Central Registry handles the Clearing, Settlement of the shares or bonds
At Time T, T+1, T+2
Brokerage firm receives the transcripts of ownership or the physical shares themselves
Brokerage firm gives the bookkeeper of the client the physical shares or the transcripts of ownership

The factors used to determine the queuing and matching priority of orders are as follows:

  • Price, the order with the best price has the highest queue priority.
  • Cross, the lowest priority is given for matching an order of the same buyer and seller broker.
  • Time, at a single price level, time of entry of an order governs its priority on a First in First Out (FIFO) basis.
  • Special Term, orders with the least trading restrictions will be given priority over orders with greater restrictions.

Order Confirmation

Direct Order Entry

Orders received from clients are entered directly into the member’s trading workstation by the respective broker. The orders are checked to make sure that they do not exceed the client, broker and brokerage firm trading limits. It will only be accepted if they are within the limits set by the respective companies in the trading system.

Order Confirmation

Once the orders are accepted by the trading system, they will automatically be time-stamped by the system and confirmed as accepted via an order status on the remote screen on the respective member workstation. The member can also choose to have the order confirmation printed out on a printer.

Order Queue

Simultaneously, these orders will get into the order queue waiting to be matched.

To view Order Confirmation Chart click here

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