palestine capital markets authority1. pcma has been established in 2005 to be the regulator for the...
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Palestine Capital Markets Authority
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PALESTINE CAPITAL MARKETS AUTHORITY Financial Sectors
Palestine Capital Markets Authority
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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)
Palestine Capital Markets Authority
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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
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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
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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
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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
Palestine Capital Markets Authority
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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
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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
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Strengthen institutional framework Protect investors and integrity of the market Provide confidence to prospective investors Simplify regulation of securities business
Objectives of Securities Directorate
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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
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Objectives- Provide confidence to actual and
prospective investors- Protect investors- Protect securities brokers- Protect investment advisors- Standardize required disclosure
Conduct of Business Rules
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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
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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
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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
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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)
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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
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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
Palestine Capital Markets Authority
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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
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Palestine Monetary Authority Law
No. 2/ 1997
Banking LawNo. 2 /2002
PMA Instructions
Financial SectorLegal Framework – Banking Institutions
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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
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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
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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
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CMA
• Securities• Insurance• Financial
Leasing• Housing
Finance
PMA
• Banks• Moneychangers• Payment
System
FFU
• Financial & Non-Financial.
Financial Sector Institutional Regulatory Framework
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CMA
FFUPMA
Institutional Regulatory FrameworkPolicy Formulation Level
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Joint Committee
PMA CMA
Institutional Regulatory FrameworkTechnical Level
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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
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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
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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
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World Bank USAID First Initiative Union Of Arab Securities Authorities Securities & Commodities Authorities/ UAE
PCMA International Partners
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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
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THANK YOU