Under the high patronage of H.E. Mr. Riad Salame, Chairman of the Capital Markets Authority (CMA) in Lebanon and Governor of the Central Bank, Beirut hosted the 15th annual session of the Francophone Institute of Financial Regulation (IFREFI) from the 1st to the 3rd of June 2016, during which Lebanon, represented by the CMA, was elected for the Vice-Presidency of the Institute.
Held at the “Four Seasons” Hotel in Beirut, this session was an opportunity for members of the IFREFI to show their commitment in supporting the Lebanese financial system in midst of the economic and political crisis the Middle East is currently facing.
In an opening speech welcoming the participants, Mr. Riad Salame announced that “Lebanon is proud to be a francophone country” before reaffirming that “the 2008 financial crisis was partly caused by the lack of communication between regulators and supervisors. We wanted to avoid facing similar situations in Lebanon, which is why we worked hard to strengthen the coordination among regulatory authorities. Despite the margin of autonomy that each authority possesses, the common denominator between the regulatory authorities overseeing banks, financial markets and the anti-money laundering authority is the Governor of the Central Bank of Lebanon appointed by the government to preside over these authorities.”
Mr. Salame announced as well the “launch of an electronic trading platform that aims at attracting Lebanese capital, from individuals, institutions, and diaspora alike to the domestic market, thus enabling the creation of additional liquidity in the financial markets which aims at facilitating the funding of SMEs and larger companies which ultimately translates in an increasingly flexible monetary policy.” He concluded saying,” We want to ensure that this platform is technically sound, well supervised and transparent. The government for its part has decided to privatize the Beirut Stock Exchange, and we believe that this initiative is a positive step for the capital markets. We hope we’ll be able to integrate the privatization with the launch of this electronic platform, which will be open to all financial products and securities, currencies, bonds, and even gold transactions. We would also like to see financial companies in Lebanon utilize this platform, which will be a market for SMEs. The BDL has developed several initiatives from its side that will benefit SMEs as well, allowing banks to release their reserve requirements if they grant these companies credits with acceptable rates. This comes in an addition to the important BDL circular number 331 which allows banks to invest in funds and digital companies of the knowledge economy, and ensuring job creation as they flourish.”
Organized by the CMA, which became an official member of the IFREFI at its 13th annual meeting held in June 2014 in Abidjan, the 15th annual session was attended by distinguished guests including 12 delegations from the 17 members of the IFREFI. Roundtable discussions covered several current issues including the “Financing of SMEs by financial markets” as well as the “Opportunities and challenges of SME financing”.
The meeting also focused on the need to protect investors, as well as the role and authority of the regulator invested in improving the practices of issuers and restoring the confidence in the financial sector. On another hand, it tackled themes related to the economic and financial climate, particularly in emerging markets, the institutional and regulatory developments within their respective jurisdictions, the collective investment funds, and the mechanisms of protecting and compensating the investors.
Participants also discussed the importance of the initiatives taken by the CMA in addition to its holistic approach to the transformation of the regulatory framework for the securities business in Lebanon, in collaboration with experts from the World Bank. On the international level, one of the highlights of 2015 was the signing of the first international financial MOU with the French Financial Markets Authority (AMF), which paved the way for the signing of various other protocols with numerous international financial regulators. Following this, the CMA is aiming to sign a memorandum of understanding with all members of the IFREFI by the end of 2016.
It is worth mentioning that the CMA reached the final stage in its application to join the International Organization of Securities Commissions (IOSCO) as an ordinary member, thanks to the unconditional support of its Chairman and Governor of the Central Bank of Lebanon, Mr. Riad Salame, and to his vision of granting this institution a leading role in the development of the capital market. This initiative comes to crown years of effort that earned the CMA its regulatory and supervision status with the ability to operate according to international standards.
It is also important to note that the IFREFI annual sessions regularly gather its member presidents in host countries to assess their different perspectives of the financial markets’ evolution, as well as present research results, share analysis of international financial news, and conduct in-depth discussion of reform projects in the field of financial markets.