The Ethiopian Securities Exchange (ESX) has announced major amendments to its Rules and Procedures governing the Over-the-Counter (OTC) Market, introducing new requirements for issuers, expanding participation in the debt market, and strengthening market oversight mechanisms.
The amendments, approved by the Ethiopian Capital Market Authority (ECMA), took effect immediately and are aimed at improving transparency, investor protection, and operational clarity within Ethiopia’s emerging capital market ecosystem.
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The OTC Market, often referred to as the ESX Unlisted Securities Platform, operates under an ECMA license and serves as a trading venue for securities that do not meet the listing requirements of the ESX Main Market or choose not to list formally. The revised framework introduces stricter admission procedures, enhanced reporting obligations, and clearer enforcement powers for the Exchange.
One of the most significant changes allows banks licensed by the National Bank of Ethiopia and pension funds to participate directly in the OTC debt market as “Dealing Participants” without obtaining a separate capital market service provider license, provided they receive ECMA authorization. The amendment formally establishes the rules governing their admission and ongoing obligations within the market.
The revised rules also require issuers seeking admission to the OTC Market to submit formal applications alongside prospectuses or information memoranda, recent financial reports, annual reports, and incorporation documents.
Under the updated framework, companies admitted to the OTC platform will face stricter continuous disclosure requirements. Issuers must submit audited financial statements within 180 days of the end of their financial year, half-year financial reports within 30 days, and disclose material events that could affect investor decisions within one calendar day.
The amendments also strengthen ESX’s enforcement powers in cases of non-compliance. Companies that fail to meet reporting or admission obligations may first receive warnings, then be placed on a public watchlist, suspended from trading, or ultimately removed from the OTC Market if violations persist.
In another notable revision, ESX removed earlier provisions governing block trades. According to the Exchange, such rules are no longer necessary because the OTC Market operates without price caps or circuit breakers.
The updated rulebook also clarifies trading procedures on the ESX Automated Trading System, including order matching principles, settlement procedures, trader registration requirements, and operational standards for market participants. Trading on the OTC platform will continue to operate between 9:00 a.m. and 3:00 p.m. Eastern African Time on Ethiopian business days.
The reforms come as Ethiopia continues efforts to operationalize its newly established capital market infrastructure following the launch of the ESX and broader financial sector reforms under the country’s capital market proclamation.
