(MENAFN- Daily News Egypt) The Egyptian Capital Market Association (ECMA) will hold a meeting next week to discuss support mechanisms to brokerages which are suffering severe shortage in revenues, ECMA Chairman Mohammed Taymour said Monday.
The shortage in revenues resulted from the decline in stock market trading volumes that range between EGP 300m and EGP 400m in a single session.
Taymour explained in statement to Daily News Egypt that after the meeting, the Board of Directors will call for a general meeting for all ECMA members to discuss decisions expected to be taken by the Board of Directors. The meeting is set to include brokerage firms, individual investors, financial institutions and Investment funds and portfolio management companies.
He added that ECMA monitored a recent trend of temporarily freezing activities among a number of brokerage firms. However, the Egyptian Financial Supervisory Authority (EFSA) demanded that these companies meet all their obligations to customers before freezing their activities.
On the other hand, Taymour said Minister of Investment Ashraf Salman declared his intention to examine the proposal put forward by ECMA regarding paying a part of the 2015 profits from non-commercial risks of the ministry's Investor Protection Fund to officials in brokerage firms and asset management companies.
He said the proposal also suggested reducing the subscription fees paid by members to the fund to ease burdens on them. The fund's value has amounted to nearly EGP 1.5bn, with a yield of approximately EGP 150m.
The fund covers only the non-commercial risks for investors, such as the bankruptcy of a brokerage firm, or one of the members being involved in fraud.
According to Taymour, CBE's new board of directors welcomed the ECMA's proposal to activate the secondary bonds market by allowing direct trading for individual investors instead of trading through the 13 major banks and insurance companies that are considered to be the primary dealers.
Egypt has sought to activate the secondary bonds market for more than seven years, to allow the trading of bonds between several bodies, including the Ministry of Finance, the CBE, EFSA, and the Egyptian Exchange.
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