Major Developments of 2022

Legislative Environment

• Issuance of the Islamic index controls for companies listed on the Palestine Stock Exchange, and approving the “Quds Islamic Index,” according to what has been approved by the Higher Sharia Supervisory Board in Palestine.
• Preparation of a draft system for dealing in foreign stock exchanges in implementation of the provisions of Article (2/3) of Decree No. (17) of 2009 regarding dealing in foreign stock exchanges, and recommending it to the Palestinian Cabinet for approval.
• Preparation and publication of draft directives relative to companies purchasing their own shares for the purposes of general advice of those interested, and to make recommendations accordingly.
• Conducting preliminary studies of a number of legislations relating to the companies purchasing and disposing of their shares, the transformation of the legal form of listed public shareholding companies, the regulation of dealing in the parallel market, the central custody of issuers of securities not listed in the regular market, and the governance of family companies.

Monitoring the Capital Market Institutions

The General Administration of Securities, through the Market Operations Supervision Department, continued its efforts to provide an appropriate climate for investment in securities, and to promote the Palestinian capital market in accordance with the highest international standards and practices, specifically the principles emanating from the International Organization of Capital Markets Supervisory Authorities (IOSCO), through:

• Monitoring of Trading: by spotting violations of behaviours and dealings of some listed securities, and dealing with them and with clients investing in such securities in accordance with the regulatory controls. As for the regulatory warnings that affect the closing prices of securities, 13 cases of price impact cancellation were dealt with as a result of the sudden change in the closing price of the security during the last five minutes of the trading session. The action of cancelling the price impact aims to enhance investors’ transparency of trading and to protect the rights of dealers in the security.
• Financial Analysis: by reviewing financial disclosures and periodically following up on the solvency reports of member securities companies, to ensure their compliance with the Securities Law and the solvency directives issued by the PCMA, in a way that ensures maintaining the safety and stability of the member securities companies’ positions, and preserving the funds and rights of their investors.
• Inspection: the inspection team is considered the monitoring arm over the entities and parties licensed by the PCMA. During the year 2022, two inspection rounds were completed according to the approved plan relating to risk-based inspection and combating money laundering and terrorist financing. The inspection team was also dispatched to carry out specialized tours at the request of the Financial Follow-up Unit.
• Complaints: During 2022, the General Administration of Securities dealt with five written complaints, based on which the PCMA took the legal measures for the purpose of protecting the rights of those dealing in the market.

Services provided to the Sector:

• Licensing: One of the main tasks of the PCMA is to license the activities and business of securities, which contributes to maintaining the integrity of dealing in the Securities Sector, protecting the Sector from risks that may be exposed to it, and protecting those dealing with it. The General Administration of Securities has granted the following licenses and renewed the activities and business of securities to the following entities for the year 2023 as follows:
• Licensing of eight member securities companies to carry out financial brokerage activities for its own account and for the account of third parties and to manage issuances.
• Licensing of 27 accredited brokers and 7 financial advisors.
• Licensing of 5 banks to act as custodians.
• Licensing the Palestine Stock Exchange.
• Licensing of other legal bodies to practice the activity of an investment advisor and issue management.

• Issuances: the PCMA agreed to increase the capital of thirteen listed companies, as follows:

• Disclosure: Initial and periodic accurate disclosure and making available the information to the public and dealers in securities, are among the main objectives of the PCMA that aim to reaching a stock exchange characterized by fairness, efficiency and transparency. The General Securities Department follows up the commitment of the companies that issue securities to the provisions of the Securities Law No. (12) of 2004 and the instructions of the disclosure system issued by the PCMA and the Stock Exchange, and takes the necessary measures against violators.

The following table shows the extent of commitment of listed companies to disclose periodic reports during 2022: