Egypt Financial Regulatory Authority approves CCP-aligned Settlement Guarantee Fund overhaul with a 650% waterfall and a six-times settlement limit

The Egypt Financial Regulatory Authority has approved new executive rules and procedures for the Settlement Guarantee Fund operated by Misr for Central Clearing, Depository and Registry, implementing its 2024 decision to regulate the fund and curb counterparty risk in securities settlement. The package restructures the fund to align with global central counterparty (CCP) operating models, including a “waterfall” approach that can raise available resources to up to 650% of members’ subscription amounts. Under the waterfall, additional financial resources are introduced from the clearing and depository company, the Investor Protection Fund for Non-Commercial Risks, and further amounts that fund members must provide when the conditions for a call are met. Members may request settlement of rights and obligations arising from trades in securities listed on Egyptian exchanges up to six times their fund subscription for transactions settling faster than the standard T+2 cycle, and the Authority may increase this limit. A seven-member management committee will govern the fund, chaired by the managing director of the central securities depository and including representatives from fund members, the Egyptian Exchange, and the Investor Protection Fund, with appointments subject to the Authority’s no-objection and a three-year term.