FRA updates voluntary delisting rules to protect shareholders, ensure market stability
Updated 2/18/2025 4:23:00 AM
Arab Finance: The Financial Regulatory Authority (FRA) has issued resolution No. 46 of 2025, amending resolution No. 11 of 2014, to enhance the rules of the voluntary delisting of listed shares, as per a statement.
The changes aim to strengthen shareholder protections, support market stability, and align with international best practices.
Under the amendment, a delisting decision now requires the approval of 75% of those present at the general assembly, with additional approval from the majority of minority shareholders not related to the main shareholder if the latter holds control.
This ensures balanced voting rights and prevents any party from being excluded.
The resolution also revokes the board's authority to decide on voluntary delisting, restoring it as a decision of the general assembly for companies whose shares were acquired through a purchase offer.
This change seeks to ensure fairness in decision-making and safeguard the rights of minority shareholders and freely traded shares.
The delisting decision must include provisions for purchasing shares from affected parties at the highest value among three criteria: the highest closing price in the month before the board called for the assembly, the average closing price over the previous three months, or a fair value assessment conducted by an independent financial advisor registered with the FRA.
The fair value study must be disclosed at least 15 days before the assembly meeting.
Companies must submit delisting documents to the Egyptian Exchange (EGX) within five business days of the general assembly's decision, with the process to be completed within 20 business days maximum. Affected parties can sell their shares daily under existing exchange rules.
The resolution also unifies the entity responsible for approving reward and incentive systems for listed companies, transferring this role from the EGX to the FRA.
Companies must now submit a disclosure report within two working days and invite the general assembly to approve the system within a week of the FRA’s approval. The amendment aims to streamline approval processes and reduce delays.
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