Egypt Sets New Rules for Short Selling on the EGX Stock Exchange

On 19 August, Egypt's Financial Regulatory Authority issued Board Resolution 155 of 2026, setting new rules for short selling on the EGX stock exchange. This replaces Decision 365 of 2026, which was issued in February.

The new rules stipulate that total collateral required for short selling positions must be 150% of the position, with a minimum cash margin of 50% of the borrowed securities' market value. If the collateral falls to 140%, a margin call must be made to restore it to 150% within two working days.

The total lending limit is set at 40% of a listed company's free float, up from 25% in the February rules. A single borrower, including related parties, is limited to 2% of the total lending.

Short selling can only occur at or above the last traded price, which must have moved upward. Brokers must have a minimum net equity of EGP 5 million (approximately US$99,000) or EGP 10 million (approximately US$197,000) if they also engage in margin trading. An average liquid capital ratio of at least 15% over six months is required.

Lenders retain the economics of the shares they lend, including cash and in-kind dividends, as well as subscription rights. The general meeting vote belongs to the holder of the borrowed share on the date of the meeting.

Brokers are given a one-month grace period to develop the necessary technology to comply with the new framework, which comes into effect the day after publication in the official gazette.