palestine capital markets authority1. pcma has been established in 2005 to be the regulator for the...

Palestine Capital Markets Authority

1

PALESTINE CAPITAL MARKETS AUTHORITY Financial Sectors


2

PCMA has been established in 2005 to be the REGULATOR for the non- banking financial sectors

Sectors under the mandate of the PCMA are:

- Securities - Insurance - Mortgage - and Leasing Finance

Palestine Capital Market Authority (PCMA)


3

Board of Directors - Chairman of the board - Members of the board - 3 members from Private Sectors - 3 members from Public Sectors ( MOF,

MONE, PMA). Management - CEO, Directorates head

PCMA Structure


4

VISION Being the proficient regulator and the

safeguard of strong and transparent capital market in Palestine.

MISSION Implementing modern, robust, transparent

and fair regulatory framework for the securities, insurance, mortgage and leasing sectors.

PCMA Strategy


5

Goal To maintain an orderly capital market, with

the institutional capability to conduct effective and responsible market oversight and supervision that supports capital investment and economic growth in Palestine

PCMA Strategy


6

General Manager Market Supervision Department - Trading Surveillance - On site inspection - Off-site analysis Corporate and Investors Affairs - Disclosure - Corporate governance - Issuance and licensing Licensing Committee Investigation Committee

PCMA Securities Directorate Structure


7

General Manager

Market Supervision Dep.

Trading Surveillancediv

On-site Inspection Div.

Off-Site Analysis Div

Corporate & Investor Affairs Dep.

Disclosure Div.

Corporate Governance Div.

Issuance & Licensing Div

Licensing Committee

Investigation Committee

PCMASecurities Directorate


8

Mission Regulate and develop the securities sector

Goal Build a strong securities sector overseen by

a competent and effective capital market authority

PCMA Securities Strategy


9

Strengthen institutional framework Protect investors and integrity of the market Provide confidence to prospective investors Simplify regulation of securities business

Objectives of Securities Directorate


10

Palestine Stock Exchange Central Depositary of Securities Custodians Securities Companies - Securities brokerage - Securities dealing - Investment advisory services - Investment portfolio management - Underwriting of securities issues - Investment fund management

Core Entities in the Securities Market


11

Objectives- Provide confidence to actual and

prospective investors- Protect investors- Protect securities brokers- Protect investment advisors- Standardize required disclosure

Conduct of Business Rules


12

Fair dealing; fiduciary duty Truth in advertising Disclosure: providers, services and costs Stability of investment Documentation of client relationship Confirmation of trades Custodian’s statement Periodic reporting to client (transactions,

cost, value of portfolio, performance)

Conduct of Business Rules


13

The Securities Directorate developed a risk-based supervisory methodology based on three supervisory tools:

Trading Surveillance system: electronic surveillance system (SMARTS Online)

On-site Inspection. Off-site Inspection.

Supervision ToolsMarket Supervision Department


14

New Corporate Governance Division to oversee compliance and promote awareness.

New disclosure regulations and arrangements during 2010.

Simple issuance licensing process, and clear comprehensive prospectus forms.

Supervision ToolsCorporate & Investors Affairs


15

Sector No. of Companies Total Assets (USD Millions)

Banks 20 7,880

Securities Companies 10 70

Insurance 9 285

Housing finance 2 70

Financial leasing 6 55

Financial Sectors(Banking and non banking)


16

20 Banking Institutions: 10 Local banks and 10 Foreign. Foreign Banks- (9 Regional banks and 1

International Bank). Out of the 20, 3 Islamic banks & 1 Micro-

Finance bank.

Banking Financial Sector


17

Assets: 45.96% Customer Deposits: 50.05% Total Deposits: 44.33% Equity: 73.99% Non Performing Loans: -40.64% No. Of branches: 51.08% Equity/Assets Ratio: from 10.30% to

12.28%.

Banking Sector Growth2005 - 2009


18

Minor direct effects on earning and no effect on soundness.

No failures. Indirect effects were through Interests rates,

foreign exchange prices and commodities prices, along with liquidity shortages in the international and regional markets.

Effects of Global Crisis on the Financial Sectors


19

Palestine Monetary Authority Law

No. 2/ 1997

Banking LawNo. 2 /2002

PMA Instructions

Financial SectorLegal Framework – Banking Institutions


20

Capital Market Authority LawNo. 13/2004

Securities Law

No. 12/2004

Insurance Law

No. 20/2005

Financial Leasing

Law(Planned

2010)

Housing Mortgage

Law(planned

2010)

Legal Framework – Non Banking Financial Sectors


21

Securities Issuance: IPOs, Secondary offerings, Prospectus.

Licensing: Securities Exchange, Securities Firms, Custodians, Investment Funds, Brokers, Advisors ….etc.

Capital Adequacy. Disclosure.

Legal Framework- PCMA Securities Instructions


22

Independent regulatory institutions Prudential supervision, corporate

governance and ethical conduct. Adoption of international standards: IFRS

and Basel standards. Open for foreign investment; - No capital controls, - No limits on foreign ownership, - Multi currency System.

Financial Sectors Legal Framework


23

CMA

• Securities• Insurance• Financial

Leasing• Housing

Finance

PMA

• Banks• Moneychangers• Payment

System

FFU

• Financial & Non-Financial.

Financial Sector Institutional Regulatory Framework


24

CMA

FFUPMA

Institutional Regulatory FrameworkPolicy Formulation Level


25

Joint Committee

PMA CMA

Institutional Regulatory FrameworkTechnical Level


26

Money Laundering Law (UN Model Law)

National Committee for Money Laundering

CMA

PMA

Relevant Government Bodies

Independent Experts

FFU

Based At PMA Professional Independent Institution

Financial Follow-Up Unit


27

Corporate Governance Two corporate

Governance Codes have been approved.

Hard and soft codes were combined in one document.

OECD principles were adopted.

Corporate Governance Code For Banks

Corporate Governance Code


28

New structure for the Stock Exchange. International Certification arrangement

Securities and Investment Institute (SII). Full IOSCO membership. T +0 settlement (in coordination with PMA’s

Real Time Gross Settlement System (RTGS) project).

PCMA Major Tasks


29

World Bank USAID First Initiative Union Of Arab Securities Authorities Securities & Commodities Authorities/ UAE

PCMA International Partners


30

PCMA is currently working with its local and international partners on several projects.

Advisors and consultants experience background from several leading international institutions: IMF, World Bank, IFC, SEC and others.

Technical Assistance & Capacity Building


31

THANK YOU

palestine capital markets authority1. pcma has been established in 2005 to be the regulator for the...

Documents

capital investment

transparent capital

orderly capital market

securities insurance

securities directorate

securities brokers

strong securities sector

securities sector goal