President Ellen Johnson Sirleaf yesterday sent for enactment into law The Securities Market Act of Liberia-2016 and The Central Securities Act of Liberia-2016.
President Sirleaf said the objective of the Bills is to create the legal and regulatory framework to establish a securities market system in Liberia for the protection of investors, “which will lead to the expansion of the private sector and the promotion of entrepreneurship in Liberia thereby creating a sustainable middle class in our economy.”
Upon enactment into law, President Sirleaf said the Securities Market Act of Liberia-2016 “shall create the legal framework to establish the Securities Exchange Commission of Liberia, which shall perform inter alia several functions, including advising the Liberian Stock Exchange of the Central Bank of Liberia on all matters relating to the securities industry.”
The Securities Exchange Commission, according to President Sirleaf, will maintain surveillance over activities in securities to ensure orderly, fair and equitable dealings in securities; register, license, authorize or regulate, in accordance with this law or any regulations made under this law, stock exchanges, investment advisers, unit trust, schemes, mutual funds, securities dealers, and their agents. It will also control and supervise their activities with a view to maintaining proper standards of conduct and acceptable practices in the securities business.
The President’s letter further informed the lawmakers that the Bill when enacted, will formulate principles for the guidance of the securities market industry; monitor the solvency of license holders and take measures to protect the interest of customers where the solvency of any such license is in doubt. It will further protect the integrity of the securities market against any abuse, fraud, and violation of this law, including abuses arising from the practices of insider trading; “and adopt measures to minimize and supervise any conflict of interest that may arise for dealers.”
Furthermore, the Bill will review, approve and regulate takeovers, mergers, acquisitions and all forms of business combinations in accordance with any law or code of practice requiring it to do so; “create the necessary atmosphere for the orderly growth and development of the capital market, and examine and approve invitations to the public.”
Meanwhile, the Central Securities Depository Bill, when enacted into law, “shall establish the operation and regulations of Central Securities Depositories to provide for the immobilization and eventual dematerialization in dealings with securities deposited in Liberia, and for connected purposes.”
“Mr. President Pro Tempore, Liberia has reached a higher level at which the establishment of these securities market systems have become desirable and necessary. The establishment of securities market in Liberia will further international trade between Liberia and other nations as well as attract greater direct foreign investments thereby increasing opportunities for employment and resulting higher standard of living in our country.”
She continued: “As government remains committed to improving the economic conditions of its citizens and residents, diversification and innovation will help relieve the heavy dependency on government and provide for alternative sources of capital.”
The Bills were sent to the committee on Banking and Currency and other relevant Committees.