Securities Sector Overview
The concept of public shareholding companies in Palestine and investing in them arose at the beginning of the last century, especially since Palestine’s geographical location was at the time a major commercial center in the region. However, the culture of dealing in financial markets in its modern sense began in 1995 with the establishment of the Palestine Stock Exchange under the direct supervision of the Ministry of Finance. At the beginning of its work, the market provided a set of regulations and instructions that organized the work of the securities sector in Palestine, in addition to providing the latest electronic systems for control, trading, settlement and transfer of securities. The role of the supervisory market continued as a self-regulatory institution until the issuance of the Securities Law No. 12 of 2004 and Capital Market Authority Law No. 13 of 2004, both of which were a pivotal turning point in the securities sector, by paving the way for the establishment of The first Palestinian Authority in 2005 to be responsible for regulating, and supervising the capital market in Palestine. Since its establishment and within a permanently turbulent political environment, the Palestinian Capital Market Authority has been striving to achieve stability in the capital market sector and to provide a regulatory and legislative environment for listed public shareholding companies with a market value of more than 4 billion US dollars distributed over five economic sectors: banking, financial services, insurance, investment, industry, and services.
The Palestinian Capital Market Authority, through the Securities Directorate, in its capacity as one of the PCMAs departments, undertakes the process of regulating, and supervising the securities sector, which consists of the Palestine Exchange, the Depository and Transfer Center, public shareholding companies, securities companies that are members of the Palestine Exchange, financial professionals and investment funds. . The PCMA worked under the powers granted to work to issue a set of instructions and circulars in the context of financial and information disclosure, mandatory listing, solvency of securities companies, transparency of dealing in securities, licensing financial markets, licensing securities companies, licensing custodians, licensing investment funds and granting professional licenses Practicing managing clients’ portfolios with securities companies, issuing securities, managing and auditing securities companies, public presentation, organizing meetings of the general assembly of listed companies, international depository certificates, and combating money laundering and terrorist financing.
On the other hand, the PCMA did not stop there. Rather, the PCMA expanded in adopting development strategies for the capital market sector that meet the needs of its dealers, by starting work on drafting specialized legislation to develop the ecosystem of Islamic financial services in Palestine, and regulating dealing in foreign exchanges, including currencies and commodities, metals and indices.
As part of the PCMA’s endeavors to place Palestine within its global standing, the PCMA had a regional presence. In the field of securities, the PCMA achieved a number of achievements that culminated in the PCMA’s obtaining in 2013 the full membership of the International Organization of Securities Commissions (IOSCO) , in addition to accepting the membership of The State of Palestine represented by the Palestinian Capital Market Authority to the signatory countries of the Memorandum of Understanding (MMOU). It is worth mentioning that the PCMA is a founding member of the Federation of Arab Securities Authorities, headquartered in Abu Dhabi, and a member of the International Network for Financial Education (INFE), which is affiliated with the Economic Cooperation Organization (OECD). On the other hand, and as a result of the Palestine Stock Exchange’s commitment to all the standards required by the regulatory body represented by the Palestinian Capital Market Authority, this commitment is the stock exchange’s membership of the Arab Federation of Exchanges, the Eurasian Federation of Exchanges, the Forum of Stock Exchanges of Islamic Countries, and Depository Institutions for African and Middle Eastern Countries. The World Federation of Exchanges, and the Corporation for National Coding Agencies, in addition to the inclusion of the Palestine Exchange in Morgan Stanley and Standard & Poor’s indices.