ECMA Sets One-Year Compliance Deadline for Public Share Issuers

Companies currently issuing shares to the public have one year to comply with the public offering directive introduced by the Ethiopian Capital Market Authority (ECMA). The announcement came as part of the Authority’s unveiling of new regulatory frameworks during the Capital Market Summit at Skylight Hotel.

The ECMA disclosed the Justice Ministry's approval of two directives: one governing initial public offerings (IPOs) and trading of securities, and another addressing the regulation of self-regulatory organizations (SROs). 

Hana Tehelku, Director General of ECMA, highlighted that any future public share issuances must be registered and approved by the Authority following the directives’ publication on ECMA’s website.

The Directive on Public Offer and Trading of Securities outlines comprehensive rules for public securities offerings in Ethiopia, whether they will be traded on an exchange or over-the-counter (OTC). Concurrently, the Directive for Recognition of Self-Regulatory Organizations (SROs) sets forth procedures for establishing, licensing, and supervising SROs in the capital market.

Hana emphasized that the absence of a robust legal framework had previously facilitated fraudulent activities and misled investors. “Investors need to be able to make informed decisions,” she stated.

Furthermore, the directive governing IPOs prohibits soliciting public investments through advertisements that present information not included in an approved prospectus.