Securities commission, EBRD launch capital market development strategy

AMMAN — Jordan should implement a set of well-coordinated reforms to fully develop its capital markets, according to a new strategy presented on Tuesday.

The capital market development strategy and roadmap for Jordan, presented by the European Bank for Reconstruction and Development (EBRD) and the Jordan Securities Commission (JSC) at an event attended by Central Bank of Jordan (CBJ) Governor Ziad Fariz, is based on a year-long examination of Jordan’s capital market, according to an EBRD statement.

“The results of the year-long examination show that Jordan has all the ingredients to operate a healthy capital market, as the required regulatory entities are in place in the country, but they need to be upgraded,” the EBRD said. 

“Furthermore, the range of available instruments needs to be broadened to encourage the use of available domestic investable funds and to attract foreign investors. Making Jordan’s capital market more attractive to issuers will therefore require legal and regulatory reforms,” it added. 

The strategy calls for better access to government securities and the development of investment funds as well as the enabling of exchange-traded funds, such as tracking a commodity or bond index. It also calls for tax policy changes as the current regime is seen as detrimental to investment funds, according to the statement. 

“Improving the effectiveness of the JSC by strengthening its authority and capacity is seen as key to enable the commission to fully play its role as a major catalyst in the review of the regulatory environment and a move to a risk-based supervision,” the EBRD, which also funded the strategy, said.

Also at the seminar, organised by the JSC in cooperation with the EBRD, Fariz delivered a speech on behalf of Prime Minister Hani Mulki, in which the premier said the Amman Stock Exchange should expand its role, rather than be limited to dealing with stocks, the Jordan News Agency, Petra, reported.

Mulki also highlighted the CBJ’s measures that aim to boost activity in the market, according to Petra.

JSC Executive Chairman Mohammad Saleh Hourani thanked the EBRD for its assistance in preparing the strategy, which he said covers all aspects of the national capital market and defines the actions that should be taken to upgrade and develop it. 

After receiving feedback and comments from stakeholders, the EBRD statement quoted Hourani as saying that “the JSC is very keen to implement the strategy in a manner that would further enhance investor protection and the investment climate in Jordan’s capital market, and that would help the sector in facing its current challenges”. 

Heike Harmgart, EBRD Head of Office in Jordan, said the bank is “pleased to partner with the JSC to work towards further developing Jordan’s capital market during these economically challenging times”. 

“What we need is the mobilisation of capital within a robust and transparent regulatory framework which allows for clear monitoring on the one hand and supplying the private sector with capital on the other,” she added.