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Ethiopian Capital Market Authority Launches Investment Bank Licensing

The Ethiopia Capital Market Authority (ECMA) has declared its intention to commence the issuance of investment bank licenses starting February 12th, heralding a significant milestone as it marks the inaugural granting of such licenses within Ethiopia.

During a press briefing held in Addis Ababa, ECMA Director-General Brook Taye revealed that the regulatory body has dedicated the past six months to crafting over 10 comprehensive guidelines aimed at governing the operations of these new investment banks. Notably, a number of private entities, including banks, have already expressed keen interest in pursuing the application process for these licenses.

Director-General Brook Taye further disclosed that the ECMA has engaged in discussions with five other government development institutions as well as two foreign banks regarding potential licensing opportunities.

Brook emphasized that the licensing procedure will be accessible to both domestic and international investors, provided that applicants adhere to the Commercial Code requirements and ECMA guidelines.

In addressing concerns about previous misleading advertising related to share sales by potential licensees, Brook acknowledged the issue and asserted the ECMA's commitment to providing accurate information as Ethiopia's capital markets continue to evolve.

Recognizing the shortage of experienced local talent, Brook outlined the ECMA's strategy to either recruit seasoned foreign professionals or invest in the training of recent graduates to gradually cultivate internal expertise.

The overarching objective is to harmonize international best practices with the developmental needs of Ethiopia's burgeoning market.

The decision to license investment banks represents a significant stride in Ethiopia's endeavor to fortify its financial sector and foster the mobilization of long-term capital.

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