The Egyptian Financial Regulatory Authority (FRA) has officially approved new operational regulations for the Settlement Guarantee Fund, aimed at reducing risks associated with counterparty representation. The updates, aligned with global best practices, seek to bolster the financial stability of Egypt’s capital markets.
The new guidelines include the application of the Waterfall Model, which allows the fund’s resources to increase by up to 650% of member subscriptions. The restructuring of the fund will ensure better alignment with the operations of Central Counterparties (CCPs), which play a crucial role in mitigating counterparty risk in global financial markets.
Further improvements include allowing members of the fund to request settlements of up to six times the amount of their subscription to increase trading activity, with the possibility of increasing this limit by the ERA. Additionally, the authority has outlined governance rules for managing the fund to ensure transparency and effective oversight.
