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Capital Markets Authority
Newsletter Special Issue #4 - August 2016
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The Special Issue: 15th Annual Session of the "Institut Francophone de la Régulation Financière" (IFREFI)
www.cma.gov.lb
Welcome Note

Welcome to the Special Issue of the CMA newsletter dedicated to providing a summary of the events and discussion that took place at the 15th Annual Session of the "Institut Francophone de la Régulation Financière" (IFREFI) held by the Capital Markets Authority at the Four Seasons Hotel, Beirut on the 1st, 2nd and 3rd of June 2016, under the patronage of H.E. Mr. Riad Salame, Chairman of the Capital Markets Authority, and Governor of the Banque du Liban.

This special issue of the newsletter will act as your reference to the 15th Annual Session of the IFREFI. Readers will be able to access useful resources and view the panel discussions held on June 1, 2016. A brief overview of the internal meetings and deliberations held on June 2 & 3 is also made available to our readers.

We hope that you enjoy this special issue of the newsletter. 


A Message of Support: Lebanon Voted as Vice President of the IFREFI
In his opening remarks, the Chairman of the CMA noted the significant importance of hosting such an event at a time where Lebanon struggles to cope with an increasingly complex regional, political, and economic outlook. The hosting of the 15th Annual Session of the IFREFI was a clear message that the international community, through the francophone countries, is yet a firm believer in Lebanon's institutions and financial sector.

And in a clear message of support by member countries present in the 15th Annual Session, Lebanon represented by the Capital Markets Authority was elected as Vice President of the IFREFI for a period of two years.


IFREFI and CMA
The IFREFI annual sessions bring together the presidents of the francophone regulatory authorities to discuss various issues in the field of international capital market development. Members of the IFREFI discuss the effects of global issues on financial markets, analyze the results of various research projects commissioned at the level of the IFREFI, discuss and comment on international studies related to global financial activity, and most importantly share their strategic outlook on reform projects in the field of financial markets.

In its first meeting as an official member, the Capital Markets Authority of Lebanon (CMA) attended the 14th Annual conference of the IFREFI held in Tunis, during which the Meeting of the Presidents revealed the extent of reforms carried out by regulators in different countries in an effort to modernize securitization operations, while raising common concerns in reference to the growing demand to set up national platforms that would boost the general public and investor confidence, ultimately helping in attracting international capital. 

The recommendations from the 14th Annual Session were picked up at the Beirut session held in June 2016. In this regard, the round-table discussions focused on topics related to encouraging and facilitating the "Financing of SMEs through the financial markets" while addressing the " opportunities and challenges of SME funding". Being an economy that has a strong presence of SMEs, the IFREFI conference held in Beirut was a great opportunity to emphasize the need to protect investors and to discuss the role and powers of the regulator in order to improve the practices of issuers, market participants, and listed companies to restore investor confidence.


Looking Ahead
At the 15th Annual Sessions, the CMA indicated that in accordance with its strategic decision, it will ensure cooperation with global financial regulators and will be signing a number of MOUs with its francophone peers in order to exchange information and technical assistance, a move that will aim to further increase confidence in markets, and allow for an efficient development of the capital markets in Lebanon.  



Capital Markets Authority

Day 1 - June 1st, 2016

IFREFI Opening Reportage
"An introduction to CMA Lebanon"

Quotes

“The Capital Markets Authority reached the final stage of joining the International Organization of Securities Commissions (IOSCO), a step that grants the CMA global recognition in its efforts to develop and protect the capital markets. This initiative comes to culminate years of hard work achieved by the CMA as an independent regulatory authority that upholds best international practices"
H.E. Mr. Riad Salameh, Chairman of the CMA, in his opening speech at the 15th Annual Session of the IFREFI
 
“One of the main topics which financial regulators should always consider is their role in ensuring the increase of financing possibilities while considering steps to decreasing unemployment "
Mr. Christian de Boissieu, Board Member of the AMF, at the opening sessions of the 15th Annual Session of the IFREFI
 
“Lebanon has a very strong banking sector financing not only the local economy and the SMEs which form the majority of the Lebanese business establishment. In order for these SMEs to seek alternative financing opportunities, the CMA should advance the development of the local market through various regulatory initiatives, however with a special focus on promoting more transparency in markets"
Mr. Jean Riachi, Presidant of FFA Private Bank, during his intervention in a round-table at the 15th Annual Session of the IFREFI

Opening Ceremony

H.E. Mr. Riad Salameh, Chairman of the CMA, Governor of Banque Du Liban, delivers the Opening Speech at the 15th Annual Session of the IFREFI
 
After praising Lebanon's francophone identity, the CMA Chairman opened his keynote speech by explaining how the absence of communication in the financial regulatory structure setup was a major factor that led to the severe financial crisis of 2007-2008, adding that this was not the case in Lebanon given the centralized regulatory system adopted where the main regulatory bodies and the Banque du Liban (Central Bank of Lebanon) are all headed by the governor of the central bank.

The Chairman then spoke about the launching of an Electronic trading Platform (ETP) which aims to ensure among many things, an enhanced and transparent capital markets activity. Mr. Salame hoped that this launch will coincide with the privatization of the Beirut Stock Exchange (BSE), a move that will enhance investor confidence in the Lebanese capital markets, while  increasing liquidity in order to better finance SMEs and large corporations listed on the exchange. Such initiatives, alongside Banque Du Liban Circular 331 that aims to support start-up companies will allow for a greater flexibility in monetary policy making.



Watch the full speech by clicking on the picture above.
Mr. Nasser Seddiqi, representing the Autorité Marocaine du Marché des Capitaux - AMMC, Acting President of the IFREFI 15th Annual Session held in Beirut, Lebanon
 
In his opening remarks as representatives of AMMC, the Acting President of the IFREFI at the Beirut sessions, Mr. Seddiqi clarified the goals of the IFREFI highlighting its highly needed role as an institution that reinforces the cooperation between its members through continuous exchange of information and sharing of knowledge and experience. Mr. Seddiqi later introduced the round table discussion topics on SME financing through capital markets, emphasizing its importance and its positive correlation with economic reform.

Watch the full speech by clicking on the picture above.
Mr. Christian de Boissieu, Board Member of the "Autorité des Marchés Financiers" (AMF), discussing financial regulatory issues in the  financial sector

Mr. Christian de Boissieu explained that the main problems surrounding the regulatory frameworks of financial markets resides in the functional areas of regulation; such as shadow banking, which have become a subject of interest for many unions and organizations around the world. Mr. de Boissieu also highlighted that the regional scale of cooperation between regulatory organizations has become problematic, pointing to the fact that such cooperation between regulators should tackle an important issue: the level of regulation which a market should undertake.

Watch the full speech by clicking on the picture above.
Mr. Michel Prada, President of the IFRS Foundation, describing the relation between financial regulation and the global markets after the 2007-2008 financial crisis at the Opening Ceremony of the 15th Annual Session of the IFREFI
 
In his capacity as President of the IFRS, Mr. Prada adddressed the 15th Annual Sessions of the IFREFI on the need to re-examine financial regulations due to the developments triggered by the latest global financial crisis, suggesting a three-pillar paradigm to tackle this issue; first through the regulation of financial intermediaries which represent the bulk of the liquidity available in international markets. Second through market regulation between the investors, issuers, and regulatory bodies. And the third pillar is understanding the relation between financial stability and economical growth, and working diligently on ensuring the proper environment for good business.

Watch the full speech by clicking on the picture above.

Round-table 1

"The Financing of SMEs through the financial markets: Opportunities and Challenges"
 
The opening round-table featured an interesting discussion that focused on the important role played by the SMEs in developing and developed economies, and why should there be a push by financial regulators and fiscal policy makers explaining he benefits and opportunities of increased public listing of SMEs (in Tunisia, 80% of companies are SMEs that create employment opportunists for almost 80% of the population, in Lebanon, they represent 90% of companies).

Although the benefits are vast, from the increase of transparency to the increase of investor interest and business development, the speakers agreed though that one important feature in today's economies: SMEs continue to face funding problems.


Participants in Round-table 1:
Moderated by: Mr. Sami Saliba, CMA Executive Board Member
Panelists:
  • M. Salah ESSAYEL, President of Conseil du Marché Financier de Tunisie (CMF)
  • M. Mircae URSACHE, vice-President, Autorité de Supervision Financière de Roumanie (ASF)
  • M. Mory SOUMAHORO, General Secretary, Conseil Régional de l’Epargne Publique et des Marchés Financiers (CREPMF)
  • Mr. Marwan Iskandar, AGM, Banque Libano Francais
  • Mr. Jean Riachi, Chairman and CEO, FFA Private Bank

To Watch the Discussions of Round-table 1, Click here

Round-table 2

"Balancing the needs of SMEs and Investor Protection"

The second round-table discussion addressed the subject of corporate governance and stressed on the issue that often with family ownership of business, accessing funding opportunities face major obstacles. This is in contrast to newly public companies which are likely to develop a more rigorous governance structures and policies that lead to more transparency. The panelists argued that it was essential for the regulators to take action in favor of improved corporate governance, a policy that would result in the best approach for the protection of investors.

Participants in Round-table 2:
Moderated by: Mr. Alain Bifani, General Director of the Ministry of Finance
Panelists:
  • M. Christian de BOISSIEU, Board Member, Autorité des Marchés Financiers (AMF France)
  • M. Mory SOUMAHORO, General Secretary, Conseil Régional de l’Epargne Publique et des Marchés Financiers (CREPMF)
  • M. Nasser SEDDIQI, representing the Autorité Marocaine du Marché des Capitaux - AMMC and Acting President of the 15th Annual IFREFI
  • M. Fadi KHALAF, General Secretary, Union des Bourses Arabes
  • Me Carlos ABOU JAOUDE, Lawyer, Abou Jaoude & Associates
 
To Watch the Discussions of Round-table 2, Click here
Click to View Full Q & A Session

Day 2 - June 2nd, 2016

"Presidents Reunion"
Capital Markets Authority (CMA) elected as Vice president of the IFREFI
 
The Reunion of the IFREFI countries' Presidents was held on the 2nd of June, 2016, during which Lebanon was elected as the Vice President of the IFREFI for a term of two years. During the closed session, Presidents of the member authorities participated in discussions relevant to the state of the global economy and its effect on the member countries. Issues pertaining to global growth prospects, monetary policies and global trends in interest rates, were visited in the context of analyzing the risks on member economies. 

In his capacity as Executive Member of the AMF Board, Mr. de Boissieu started by explaining how global growth was taking place despite global economic insecurity. A key message delivered by Mr. de Boissieu is that the slowdown the global market is witnessing was mainly due to the decrease in oil & gas prices. He estimated that the low interest rate policy that the US, Japan and Europe were adopting was likely to have damaging consequences, such as a rise in long-term lending rates and its negative effect on global finance, thus turning a current economic issue into a systemic problem. 

In its turn, the Lebanese Capital Markets Authority represented by its Board Member Mr. Sami Saliba, presented an overview of its recent activities in the Lebanese market, whereby Mr. Saliba stated that the CMA has increased its presence in the local market through the recently issued implementing regulations, which had a positive impact on the financial markets. Mr. Saliba highlighted that despite the current economic and political complexities the region is facing, and specifically Lebanon with the unprecedented crisis of refugee influx, the Banque Du Liban (Central Bank of Lebanon) continues to support the economy through various policies and stimulus packages. Mr. Saliba reiterated the importance of the upcoming Electronic Trading Platform (ETP) and its great effect on the market, while sharing with the Presidents of the IFREFI delegations the importance of the MOUs signed with Tunisia and Germany (BAFIN), and the upcoming awaited IOSCO membership (International Organization of Securities Commissions).

The meeting was concluded with suggestions and recommendations to be revisited by special committees of the IFREFI before their next meeting in Liberville, Gabon.

Day 3 - June 3rd, 2016

"Role and position of the Regulatory Authority in improving issuer practices and restoring investor confidence"
 
During this technical seminar, four panels were held on the topic of building a strong regulatory framework. The first panel which was presented by CMA Financial Control Unit staff, Ali Fadoun & Yasmine Fakhoury, alongside Mr. Etienne Cunin, Deputy Director at the AMF, focused on issues concerning market entry - such as IPOs and the related due diligence on financial institutions, while detailing certain aspects of their operations such as the control procedures related to examining the contents of prospectus of financial securities and conducting due diligence on products, the risk factors associated with financial products offered to the public, and enhancing transparency in securities offerings.

In the second panel, Mr. Etienne Cunin (AMF) joined by Mr. Mehdi Zaabouti representing the Conseil du Marche Financier Tunisia, discussed issues and challenges faced by regulators in the effort to control financial transactions through the setup of clear and organized procedures for reporting of financial statements using exisiting accounting standards which would help instill a more clear and transparent and equal oversight operation by the regulators. 

Delegates from the Commission des Marchés Financiers Cameroon and the Autorité Marocaine du Marché des Capitaux presented the final panel which revolved around the surveillance of issuers in order to avoid misconduct, and the use of available tools by the regulator such as enhancing corporate governance policies and applying sanctions when needed to ensure the smooth and effective operation of issuance of financial securities.

The Media Hub

Click to View Full Media Coverage Report
15th Annual Sessions of the IFREFI - Opening Ceremony
IFREFI Presidents' Reunion
The Regulatory meetings of the IFREFI Participating Delagates

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