03 Mar 2021

 

Factoring Companies Now Able to Finance Margin Lending

Egyptian factoring companies are now able to finance margin lending by brokerage companies under new regulations released by the Financial Regulatory Authority (FRA) yesterday. The move is meant to give brokerages access to new sources of funding and stimulate trading on the EGX. Eligible brokers are required to get approval from the FRA before engaging in margin lending. Allowing non-bank lenders to finance margin lending will likely be a welcome move for brokerages and industry associations, which have for years been seeking

greater access to financing for the practice. Banks are typically reluctant to finance margin trading out of fear of turbulence in the stock market. (Source: Financial Regulatory Authority, Enterprise)