The Ethiopian Securities Exchange (ESX) Rulebook of 2024 establishes the rules and procedures governing the operation of the Ethiopian securities market. It includes guidelines for general operations, membership, listing, trading, and disciplinary actions.
General Rules
The General Rules outline the administration of securities trading and the role of the Exchange in regulating Trading Members. Issuers and Trading Members must adhere to the rules, with the Exchange having the authority to amend, waive, or interpret them, subject to the Ethiopian Capital Market Authority (ECMA) approval. The rulebook also addresses language requirements, conduct standards, liabilities, fees, and indemnification provisions.
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Membership Rules
Membership regulations specify the categories of Trading Members, application processes, operational requirements, and cessation of rights. Members must maintain compliance with liquidity standards, internal controls, and reporting obligations. The rules also govern the responsibilities of Appointed Representatives, compliance officers, securities traders, and market makers, alongside the management of branch offices and client compensation through the Clients’ Compensation Fund.
Listing Rules
The listing rules detail procedures for issuers seeking to list securities on the Exchange, covering equity shares, fixed-income securities, and exchange-traded funds (ETFs). Requirements include financial disclosure, governance standards, and compliance obligations. Provisions are made for corporate actions, voluntary delisting, and Sharia-compliant securities. Administrative sanctions apply for violations of listing regulations.
Trading Rules
Trading rules govern the conduct of Trading Members, order handling, settlement, and record-keeping. These include regulations on KYC, client fund management, best execution practices, trading hours, and system requirements. Specific rules address prohibited activities, such as insider trading and front-running, and mandate the use of the Exchange’s automated trading system.
Disciplinary and Dispute Resolution
Disciplinary procedures and dispute resolution rules outline the management of complaints and enforcement actions. The Exchange can investigate grievances, impose sanctions, and mediate disputes. Arbitration is available through designated forums, with costs borne by the disputing parties. Violations of disciplinary rules are subject to administrative penalties.
The Ethiopian Securities Exchange Rulebook 2024 provides a detailed framework to regulate the securities market, ensuring compliance, transparency, and adherence to established procedures.
