Sector Overview
The securities sector in Palestine emerged in 1995 when the Palestine Securities Exchange was set up as a private company by PADICO, after the Palestinian National Authority agreed to proceed with the implementation of the project to establish a market and thus signing an agreement to operate the market in 1996. Tuesday, February 18, 1997 witnessed the 1st trading session within the market.
PEX has provided, from the onset, a set of rules and regulations that organized the work of the securities sector in Palestine, in addition to the latest electronic systems for monitoring, trading, settlement and transfer of securities. Moreover, PEX was subjected to the supervision of the Palestinian Ministry of Finance since its establishment until 2005, when the Palestine Capital Market Authority was set up.
The year 2004 witnessed the issuance of the securities law No. “12” and the law of the Capital Market Authority No. “13” for the year 2004.
In 2005, Palestine Capital Market Authority was established as an autonomous agency by Law No. “13” of the year 2004, thus, becoming the agency that organizes, supervises and controls the capital markets in Palestine. A set of resolutions and circulars were issued governing the functioning of the securities sector regarding the issuance, disclosure, control, licensing and trading commissions. It has also kept pace with the main developments and legislations in the securities sector through the implementation of the instructions approved the Board of Directors.
In accordance with the Securities Law No. “12” and the Capital Market Authority Law No. “13” for the year 2004, Palestine Securities sector consists of the below-mentioned bodies supervised and controlled by PCMA. They are enclosed as the following:
1-   Palestine Exchange and the Centre of Depository and settlement.
2-   Public-shareholding companies.
3-   Securities companies’ members of the Palestine Exchange.
4-   Financial professionals.
5-   Investment funds.
During the year 2013, the General Directorate of Securities achieved a series of achievements, which were culminated when PCMA was admitted as an ordinary member in the International Organization for Securities Commissions (IOSCO), in addition to the accession of the State of Palestine, represented by PCMA, as a signatory of MMOU. Furthermore, PCMA has developed the legal and regulatory framework of the securities sector in Palestine, where the BOD in its meeting No. 05/2013, approved the issuance of the management instructions and auditing in the securities companies. These instructions were given to the securities companies for a period of six months from the date of entry in order to reconcile situations, meet the requirements and comply with these instructions. PCMA has also issued a decision regarding the maximum limits for the fluctuation of securities prices and the extension of the continuous trading session period, so that the margin of the price volatility of securities is 7.5% in primary market and 5% in secondary market, in addition to the adjustment in the continuous trading session period and any related periods.
During the year 2017, PCMA approved the implementation of the e-IPO system “EKTITAB”, which was firstly implemented through the initial public offering of Sanad Co. This system has added-value to the electronic subscription processes, especially PCMA’s initiative to adopt the investor’s number in the underwriting.
Within the context of PCMA and PEX efforts towards the development of the disclosure processes, “IFSAH” which is a non-financial disclosure electronic system was launched in 2017. This system allows companies to disclose non-financial information electronically and to be directly uploaded to PEX website. In terms of anti-money laundering and financing of terrorism, PCMA has adopted new account opening forms that meet the requirements of “اعرف عميلك” in line with the relevant legislations, most notably Law No. “20” for the year 2015 on anti-money laundering and financing of terrorism and Law No. “4” for the year 2016 on anti-money laundering and financing of terrorism regarding the sectors under supervision of Palestine Capital Market Authority.
By the end of 2017, Al-Quds index closed at 574.58 points, recording an increase of 8.38% from its closing at the end of 2016 at 530.16 points, while the market capitalization reached $3,891,495,531 by the end of 2017, achieving an increase of 15% from the previous year.
Meanwhile, the number of listed companies in Palestine Stock Exchange reached 48 companies.