Stock market to be privatized in 2013

New regulatory framework for dealing

The Financial Markets Authority has begun taking measures needed to encourage local firms to list their stocks on the Beirut Stock Exchange, according to Ghaleb Mahmasani, vice-president of the BSE.

“The Financial Markets Authority is working to activate the stock market through setting up a new regulatory framework for dealing,” said Mahmasani. The Financial Markets Authority is an independent body created through the capital markets law (2011) for regulating and supervising capital markets. As per the law, the authority’s main task is to turn the stock market into a private institution within one year from its accreditation.

Mahmasani said the law stipulates that the BSE should be privatized by end-September 2013: “The first step is to turn the BSE into a stock company owned by the State.” He said the State will, at a later stage, sell the BSE to the private sector. The Financial Markets Authority shall decide, with the government, how the privatization is to be carried out.

The Financial Markets Authority is led by a board of directors comprising seven members. It is chaired by the Central Bank governor, and includes as members the director general of the Ministry of Finance, the director general of the Ministry of Economy and Trade, the chairman of the Banking Control Commission (BCC), and three experts. In July, the Cabinet completed the board’s establishment through the appointment of three experts: Sami Saliba, Firas Safieddine, and Fadi el Fakih.

The law also states that the authority shall set the regulatory framework for listing financial instruments, issue licenses to brokers and financial rating agencies, and license collective investment schemes. The authority is also tasked with protecting investors from illegal practices, issue fines for violations of the capital markets law, and initiate legal action against insider trading crimes.