Ethiopia has issued a legal directive that will govern the licensing of capital market service providers as the nation seeks to consolidate the securities and exchange sector. The directives came into effect on January 18th, 2024.

• Companies interested in acquiring licenses in the capital market are expected to pay an application fee.
• Within 15 days, the authority will determine successful applicants and set a date for certificate inspection.
• They’ll also need compile documents including copies of commercial registration, tax documentation, and articles of association. 

Under the new regulations, the Ethiopian Capital Markets Authority will issue 15 different types of licenses to service providers. They include licenses for securities brokers, securities dealers, securities custodians; and investment banks. 

The applicant also has to provide documents proving market turgidity and compliance with minimum capital requirements. After acquiring a license, the company has to pay a non-refundable licensing fee. 

“It provides a comprehensive legal framework that will ensure the integrity and stability of the capital market,” said the director general of the Ethiopian Capital Market Authority, Dr. Brook Taye. 

The 150-page directive also outlines the responsibilities of various capital market service providers and their appointed representatives, strictly caging their activities within the licenses they sought for. 

Ethiopia’s decision to venture into capital markets will also allow investments from buoyant multinational companies strengthening the economy. Moreover, local enterprises will gain visibility and attract prominent and profitable partnerships.