Egypt’s Financial Regulatory Authority has issued rules governing the establishment of hedge funds for the first time and allowing existing investment funds to undertake hedge fund activity under specified conditions. Authorization will be based on investment limits and controls set out in an authority-approved prospectus or information memorandum. The framework covers investments in equities, debt instruments, exchange-traded derivatives, securities borrowed for short selling and other actively traded financial instruments. Fund documents must define the investment strategy, target investor eligibility, asset allocation, leverage, counterparty exposure, liquidity and concentration limits, stress testing and loss-control arrangements. Investment managers must have relevant expertise and systems, assess counterparties, monitor leverage, conduct stress tests and scenario analysis, and verify collateral sufficiency. They must also periodically disclose leverage, material stress-test results, breaches of investment or risk limits, corrective measures and significant strategy changes to the authority and investors. The decision will be published within days in the Egyptian Gazette and on the authority’s website. It will take effect on the day after its publication.
Egypt Financial Regulatory Authority2026-08-09
Egypt's Financial Regulatory Authority issues first framework for hedge funds and existing fund conversions
Egypt’s Financial Regulatory Authority has issued the first framework for establishing hedge funds and permitting existing investment funds to conduct hedge fund activity. The rules set requirements for investment policies, leverage and risk controls, manager obligations and investor disclosures. They will take effect on the day after publication in the Egyptian Gazette.