(Adds comment on new rule in sixth paragraph.)

March 4 (Bloomberg) -- Egyptian securities regulators may require brokerages and fund managers to disclose the owners of financial assets traded in the country as part of a probe of officials linked to ousted President Hosni Mubarak.

The Egyptian Financial Regulatory Authority, the bourse and the main clearing house “have the right to demand any data” on companies’ and funds’ shareholders, according to regulations posted on the authority’s website and dated March 2. Those who fail to provide the information by the next business day risk facing “decisive measures,” the authority said, without providing details.

The regulatory authority said it adopted the rule as part of an order by Egypt’s public prosecutors to freeze the assets of Mubarak and former officials under investigation for corruption. Some of them, including Ahmed Ezz, chairman of Ezz Steel, are on trial.

“The requirement that investment managers report to the government who their clients are clearly is designed to allow the government to recover assets that they maybe believe were improperly obtained,” Larry Harris, a professor of finance and business economics at the Marshall School of Business at the University of Southern California in Los Angeles, said in an interview yesterday.

Calls to the regulatory authority in Cairo after business hours weren’t immediately returned. Ezz said in a statement on Feb. 14 the corruption allegations are “baseless.”

Exchange Closed

Mubarak was forced to resign on Feb. 11 after a popular revolt inspired by an uprising in Tunisia that led to the ouster of President Zine El Abidine Ben Ali a month earlier.

“Given the close, corrupt ties between Mubarak and the business elite any move to increase disclosure will work against allies of Mubarak,” Lisa Blaydes, an assistant professor of political science at Stanford University in Stanford, California, said in an e-mail response to questions. “Historically, violations of existing regulations were prosecuted in a very politicized manner.”

The ability “of democracy activists to pursue an agenda of transitional justice in the economic realm might be limited by the interconnecting ties between the military and Mubarak regime cronies,” Blaydes said.

The bourse has been closed since Jan. 27 after the benchmark EGX 30 Index fell 16 percent amid the uprising. The exchange yesterday postponed the resumption of trading for the second time in a week after Prime Minister Ahmed Shafik resigned. No date was given for the reopening.

New Government

Shafik, who was named prime minister by Mubarak in January in a failed attempt to placate protesters, quit yesterday. The Supreme Council of the Armed Forces, which now rules Egypt, asked former Transportation Minister Essam Sharaf to form a new government.

A date to resume trading will be determined “after consultations with the Prime Minister,” the exchange said in an e-mailed statement today. Bourse Chairman Khaled Seyam said last month trading would start on March 1, then reversed course and set a date of March 6.

The regulatory authority said in its March 2 statement that it will require brokerages and fund managers to “immediately” disclose any portfolios or offshore funds or transfers linked to officials under investigation.

Seeking Transparency

The regulation may bolster investor confidence in Egypt, said Samer Shehata, assistant professor at the Edmund A. Walsh School of Foreign Service at Georgetown University in Washington.

“These kinds of general transparency issues have been desperately lacking in the Egyptian economy,” Shehata said in a telephone interview yesterday. The move will help “provide more confidence for all different types of investors,” he said.

--With reporting by Ben Bain in New York. Editors: Alan Mirabella, David Papadopoulos.

To contact the reporter on this story: Alaa Shahine in Dubai at [email protected]

To contact the editors responsible for this story: Claudia Maedler at [email protected] ; David Papadopoulos at [email protected]