The Ethiopian Capital Markets Authority (ECMA) has issued a stern public warning to share companies and investors following the expiration of the deadline for registering previously issued securities on November 16, 2018 (E.C).
According to the Authority, all issuers are legally required to register both newly issued and previously issued securities held by shareholders. With the registration window now closed, any offering or trading of unregistered securities constitutes a criminal offense.
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The ECMA states that violators face 7 to 15 years of rigorous imprisonment and fines ranging from 150,000 to 300,000 birr.
In addition to criminal penalties, companies may face administrative sanctions, including suspension, blacklisting of executives and board members, and further financial penalties.
The Authority urged all stock companies that have not yet registered their shares to immediately halt any activities related to the sale or transfer of both new and existing shares. Firms operating stock trading offices were also instructed to cease trading operations until compliance is ensured.
The public has been strongly advised not to engage in trading unregistered shares, and to verify whether any security is registered or exempted before participating in the market. Investors are also cautioned not to transact through brokers or dealers who are not licensed by the Authority or outside authorized over-the-counter or decentralized trading platforms.
ECMA encouraged citizens to submit information, tips, or requests related to companies that continue to trade unregistered securities using the contact address provided by the Authority.
The warning marks one of the strongest enforcement signals issued ahead of the country’s emerging capital market operations.
