The Egyptian Exchange’s (EGX) Board of Directors issued a new amendment to the executive procedures for registration regulations. This amendment obliges subscribed companies to post their quarterly financial statements within 45 days from the end date of the specified legal period for sending financial statements.
In the case that this commitment is breached, the company’s shares will be suspended from trading.
This amendment comes as a substitute for an old rule, which prevented a company’s shares from being suspended from trading unless 15 days have passed since the specified period for sending financial statements for two consecutive fiscal years.
The amendment included stipulations that the financial statements must be handed in before the beginning of the trading session and by 9.30am instead of at 10am. Therefore, the EGX will be able to send the statements to investors before the beginning of the session.
Article 64 of the executive procedures for registration regulations states that a company’s annual financial statement should be prepared and approved by the General Assembly three months before the end of the fiscal year.
The EGX obliges companies to provide a copy of its quarterly financial statements issued by the Board of Directors, accompanied by a limited review of the auditor’s report at least 45 days before the end of the fiscal period.
EGX chairperson Mohamed Omran said that the amendment to this article was an urgent matter. The rule in its old form allowed companies to delay sending their statements for long periods before the EGX could take legal action, which is incompatible with the protection of investors’ rights.
Omran added that the amendment reflects the EGX’s interest in maintaining the flexibility of the disclosure system, and at the same time shows its intolerance of violations to investors’ rights.
This new rule will be validated and activated following the Egyptian Financial Supervisory Authority’s (EFSA) approval.