Investor Coding, Custody Services, and Central Securities Depository by Misr for Central Clearing for Joint Stock Companies

Misr for Central Clearing, Depository, and Registry (MCDR) is the authority responsible for the clearing, settlement, and central depository of securities in Egypt. It plays a vital role in the Egyptian capital market by providing a secure and efficient environment for the trading of securities.

Below is an overview of the key terms and concepts:

• Coding is the process of issuing a unique code to every investor (individual or company) who wishes to trade securities on the Egyptian Exchange.
• This code is issued through brokerage firms, in cooperation with Misr for Clearing.
• The code acts as the investor’s identity in the stock market, enabling them to buy and sell securities.
• Coding requires submitting certain documents (e.g., commercial register for joint stock companies, and details about board members and major shareholders).
• The code remains valid until the expiration of the commercial register or for a maximum of five years, after which renewal requires updated documents.

• A Custodian is an entity (usually a bank or a specialized company) licensed by the Financial Regulatory Authority (FRA) to hold and manage securities on behalf of clients (the investors).
• Responsibilities include:
  • Holding securities securely
  • Settling transactions
  • Collecting dividends
  • Issuing periodic account statements
• Custodians must segregate their own assets from those of their clients and act with the utmost care in executing client instructions and protecting their interests.
• A formal agreement is signed between the client and the custodian outlining the services, fees, and conditions.

• The Central Depository is the system managed by Misr for Central Clearing that electronically holds and registers securities, replacing paper certificates.
• The goal is to simplify and secure the trading process and reduce risks associated with physical ownership of securities.
• Under this system, ownership of stocks, bonds, and other securities is registered in the records of Misr for Clearing, and ownership is transferred electronically between parties.

1. Coding of Companies and Shareholders:
2. Central Depository of Company Shares:
3. Clearing and Settlement of Transactions:
4. Custody Services:
5. Shareholder Record Management:
6. Dividend and Bonus Share Distribution:

These systems and procedures are designed to provide a robust regulatory and oversight framework for the Egyptian capital market. They aim to enhance confidence, transparency, and stability, contributing to the market’s overall growth and integrity.