Tender launched for
electronic stock exchange

Follows delay in privatization

of Beirut Stock Exchange

The Capital Markets Authority (CMA) has launched a request for proposal for a tender to select an operator for its planned electronic trading platform (ETP).

The operator could be one company or a consortium of companies and the ETP will operate as a stock exchange in the secondary market, said Firas Safieddine, Vice Chairman of the CMA.

Interested parties will be given four months to submit their bids for the tender. Once an operator is selected it will be given six to nine months to set up the system, so the ETP would start operations within one year, Safieddine said.

The operator will be given leeway to decide on how to proceed with the launch of the ETP.

“We gave them extreme flexibility,” Safieddine said. “The would-be operator knows beforehand the size of the market and its potentials and what to start with.”

The operator must submit a business plan for a minimum of five years showing their vision on how they will run the ETP and the schedule of their activities.

A very broad range of securities will be eligible for listing on the ETP such as equities, investment funds, and exchange-traded funds, as well as structured products and corporate bonds. “The listing requirements will be much easier for small and medium enterprises and startups,” Safieddine said.

Government debt instruments such as treasury bills and Eurobonds, the Central Bank’s certificates of deposit (CDs), and currencies will also be eligible for listing. Safieddine said that part of the Eurobonds will be listed as the other part is held by foreign companies that don’t have to list them on the local ETP. The CMA will also allow trading in derivatives such as futures and options in addition to physical trading in gold bullion. “We are creating the regulations and the boundaries to structure derivative products which will be allowed for trading in Lebanon in the future,” he said.

The CMA’s move to launch the ETP tender came after the project to privatize the Beirut Stock Exchange (BSE) was delayed following the Cabinet’s failure to appoint two interim board members for the BSE. The job of the board was to deliver the BSE license within one year to the private sector.