Authority Issues Directive Governing Collective Investment Schemes

ADDIS ABABA – The Ethiopian Capital Market Authority (ECMA) announced the issuance of a comprehensive legal framework governing collective investment schemes operation in the country. The move comes a little over a year after the nation’s capital market regulator first put out the draft rules for collective investment schemes for public discussions. On Wednesday, the Authority said the legal document, titled Collective Investment Schemes Operation Directive No. 1150/2026, has been registered and approved by the Ministry of Justice as of Sept 23, 2026. Issued under Capital Market Proclamation No. 1248/2021, the directive serves as a legal framework governing the establishment, registration, operation and administration of collective investment schemes in Ethiopia. The 227-page legal document, detailed in 12 chapters, also outlines additional duties of scheme operators, custodians and other professional parties. “This Directive is a significant step in channeling the savings of Ethiopians into productive investment through professional management and strong investor protection,” ECMA Director General Hana Tehelku said. “It broadens access to the capital market and opens the way for the wider public to share in the country’s economic growth,” she added. The CIS Directive recognises six types of schemes: Money Market Funds, Mutual Funds, Real Estate Investment Funds, Exchange Traded Funds (ETFs), Alternative Investment Funds and Special Designation Funds. Several permissible legal forms are set out for establishing the schemes, along with requirements to register the schemes in the Directive that states no scheme may be offered to the public without registration by the Capital Market Authority. The directive mandates every scheme to have an operator at all times. It also requires scheme assets to be held by an independent Custodian, separate from the Operator, and schemes to make ongoing disclosures. Operators and Custodians should be licensed under the Capital Market Service Providers Licensing and Supervision Directive No. 980/2024. ECMA, which will supervise registered schemes and their service providers, expressed its “readiness to work collaboratively with Scheme Operators, Custodians, Investors and all stakeholders to build a sound and trusted” collective investment scheme market in Ethiopia.