Dr. Ashraf El-Sharkawy, Chairman of the Egyptian Financial Supervisory Authority (EFSA), stated that the country’s financial regulator will not approve the application of any new mechanisms such as options, derivatives as they represent high-risk financial instruments.
In a statement to MENA, El-Sharkawy said; “Rejecting to introduce such financial instruments was not only due to their violation of the Islamic laws (Shariah) but also to their lack of a required infrastructure.”
The EFSA Chairman further noted that the Egyptian Exchange is currently not ready to introduce new financial instruments.
“The global markets do not apply those financial instruments any more due to their negative impact.”
“Our main focus for the current period is to upgrade the existing mechanisms and financial instruments like the opening and closing prices, the pre-trading session, the momentary settlement.”
Referring to the license agreement signed between the Egyptian Exchange and NYSE Liffe, the European derivatives business of NYSE Euronext, El-Sharkawy described the agreement as ‘positive’ as it will enable NYSE Liffe to work with market participants to develop and launch a futures contract based on the EGX 30 index in the London Stock Market, not the EGX.
