ECMA Takes Action to Protect Investors and Foster Confidence in Capital Market

The Ethiopian Capital Market Authority (ECMA) has signed two Memoranda of Understanding (MoUs). These agreements aim to enhance market integrity, promote transparency, and bolster technological capabilities for enhanced market surveillance. By doing so, the ECMA seeks to safeguard investors and foster confidence in the Ethiopian capital market.

The first MoU, titled ‘Capital Market Integrity Task Force Cooperation and Coordination Agreement No 01/2024,’ was signed by the ECMA, Ministry of Justice, Financial Intelligence Services, Ministry of Trade and Regional Integration, and the Federal Police Commission. This agreement establishes the “Capital Market Integrity Task Force,” which will collaborate to maintain the integrity of the capital market.

The primary objective of this task force is to identify, investigate, and prosecute illegal activities in the marketplace, ensuring an orderly and fair market environment. It will focus on exposing companies and promoters engaged in deceptive and illegal share offering practices, which have resulted in substantial losses for investors. By addressing such fraudulent activities, it is said that the task force aims to protect investors and restore confidence in the market.

Simultaneously, the ECMA has entered into a strategic cooperation agreement with the Information Network Security Administration, Ethiopian Artificial Intelligence Institute, and National ID to enhance its technological infrastructure and capacity. This collaboration includes cybersecurity support, strengthening the Authority’s ability to monitor the market and protect investors’ interests.

This approach is said to be put in place intending to allow the Authority to address potential risks and enhance its regulatory framework effectively.

The Ethiopian Capital Market Authority firmly believes that these agreements will play a crucial role in fulfilling its powers and duties outlined in Proclamation No. 1248/2021. It was disclosed that the Authority’s primary goal is to reduce systemic risk, maintain the integrity of the capital market, and facilitate seamless transactions. By taking concrete steps to combat fraudulent activities and enhance technological capabilities, the ECMA aims to safeguard investors and instill confidence in the Ethiopian capital market.