Results package : capital market development -- 263-0252

Assistance will focus on four areas: (1) market architecture; (2) market institutions; (3) the regulatory environment; and (4) financial instruments. The market architecture component of the project will support the introduction of state-of-the-art, computer-assisted operational technologies for stock, bond, and money markets. This component will support partner organizations, including the Capital Markets Authority (CMA), the Central Bank of Egypt (CBE), the Egyptian Stock Exchange (ESE), Misr Clearing, Settling, and Depository Corporation (MCSD), and other organizations in planning, designing specifications for, and installing efficient (automated), fair and secure trading, clearing, settling, depository, and market information systems. Although each component in the RP supports indirectly the development of various market participant organizations, a separate institutional development component will directly support the strengthening of the organizational and personnel capacities of several partners including CMA, the CBE, MCSD, the Stock Exchange, the Egyptian Capital Markets Association (ECMA), the brokerage community, and other financial intermediaries. Specific efforts will include developing: broker and broker principal certification programs; a cadre of professional financial analysts for the mutual fund industry through the U.S.-based Chartered Financial Analyst program, which operates in coordination with the American University College; and an education and awareness program for journalists, key groups, and the general public. The regulatory component will help to strengthen Egypt"s capital market regulatory environment, prudential regulations, guidelines, and operating procedures of various market participants. This component will provide specialized regulatory consultancies to the CMA, the CBE, and several other capital market institutions which require assistance in identifying regulatory needs and solutions. It focuses on upgrading industry standards and the adoption of internationally accepted accounting norms and financial reports. Over time it will assist Egypt in adopting widely accepted international regulatory standards, such as those promoted by the International Organization of Securities Commissions (IOSCO), the Federation Internationale des Bourses De Valuers (FIBV), and the Group of 30 (G 30). The financial instruments component will work with the CBE to: (1) activate a money market by significantly increasing volumes of secondary trading in Treasury bills and interbank funds; and (2) activate a bond market through daily trading of Treasury bonds and fixed rate corporate bonds. The RP will contribute to Intermediate Result 1.3, Accelerated Privatization and Improved Government of Egypt Support of Competitive Markets, as well as Intermediate Result 1.2.3, Expand and Deepen Financial Services, of the Mission"s Strategic Objective 1: Accelerated Private Sector-led, Export-oriented Growth.