The Securities Exchange Law was enacted on 31 July 2013. It provides the framework for the establishment of a stock exchange. While Myanmar already has a small stock exchange in operation with two listed securities, the lack of a comprehensive regulatory framework has prevented its development. The Myanmar government appears to be determined to rectify the previous shortcomings with the enactment of this new law.
The Securities Exchange Law:
- establishes the securities and exchange commission, the main regulatory body which will supervise the securities market;
- sets out the licenses available for securities businesses (dealing; brokerage; underwriting; investment advisory and company’s representative);
- sets out the framework for the establishment of the stock exchange;
- provides for the establishment of an over-the-counter market;
- sets out the prohibited acts in relation to securities trading (e.g. insider trading) and the relevant penalties; and
- provides for the establishment of a securities depository and clearing business.
The next important immediate step is for the associated rules, which will provide the necessary details of the Securities Exchange Law, to be issued. Such rules should be issued within 90 days.
The next important immediate step is for the associated rules, which will provide the necessary details of the Securities Exchange Law, to be issued. Such rules should be issued within 90 days.
Recent reports indicate that the proposed opening of the stock exchange is planned for 2015.
While this is an exciting development for the establishment of Myanmar’s capital markets, further progress must also be made to issue the implementing regulations required for the Securities Exchange Law, update the Myanmar company law legislation (which we understand is underway) and establish a robust regulatory and reporting framework which will be able to withstand the scrutiny of domestic and international investors.
Nonetheless, the new Securities Exchange Law is another step towards the modernization of Myanmar which brings promise of a bright future for the country.
Other Key Myanmar Legal Updates – July/August 2013
Contact
Ms. Regula Schmidhauser
Business Development Manager
Myanmar, Thailand and Lao PDR
