Addis Ababa, Ethiopia – February 19, 2025
The Ethiopian Capital Market Authority (ECMA) has officially issued a Securities Investment Advisor License to Ethio Capital Solutions PLC, expanding the range of professional investment advisory services available in the country’s capital market. The move is part of ECMA’s broader effort to develop a well-regulated, transparent, and dynamic financial ecosystem.
What the License Means
The Securities Investment Advisor License allows Ethio Capital Solutions PLC to provide expert financial advisory services to various market participants, including issuers, individual investors, and institutional investors. The advisory services will focus on helping clients navigate the complexities of securities investments while maintaining high ethical standards, investor protection principles, and regulatory compliance requirements.
The license was issued in accordance with Capital Market Service Providers Licensing Directive No. 980/2024, which outlines the qualifications, ethical standards, and operational criteria required for firms seeking to offer investment advisory services.
Significance for the Ethiopian Capital Market
The Ethiopian capital market is still in its early stages of development following the establishment of ECMA and the introduction of the Capital Markets Proclamation. The licensing of investment advisors like Ethio Capital Solutions PLC is expected to strengthen market confidence by ensuring that investors—both local and international—have access to reliable financial expertise and guidance.
Investment advisors play a critical role in providing market analysis, portfolio management strategies, and risk assessment, allowing investors to make informed decisions. With this development, Ethiopia’s capital market is taking a step toward increased professionalism, transparency, and investor participation.
Regulatory Oversight and Compliance
ECMA has emphasized that all licensed Securities Investment Advisors must adhere to strict compliance and reporting requirements. These include:
- Ensuring that investment advice is objective and in the best interest of clients
- Complying with ethical standards and conflict-of-interest regulations
- Upholding investor protection principles to prevent fraudulent or misleading practices
- Regularly reporting to ECMA on business activities and adherence to market regulations
The Ethiopian Capital Market Authority expects that Ethio Capital Solutions PLC will contribute to financial literacy, investor education, and overall market development. As the country continues to implement its capital market framework, more financial service providers are expected to enter the sector, offering a wider range of services to support Ethiopia’s growing investment landscape.
This development is viewed as a positive step toward enhancing investor confidence, improving access to investment expertise, and fostering a well-regulated securities market in Ethiopia.
The introduction of licensed investment advisors is a strong move toward creating a well-regulated, dynamic, and professional financial market in Ethiopia. This will help transition the economy from a bank-dominated financial system to a more diversified one with opportunities for capital market investments.