Ethiopia Moves to Regulate Mutual Funds and Other Public Investment Schemes

Ethiopia has approved a new regulatory framework for mutual funds and other collective investment schemes, establishing rules for investment vehicles that could give the public wider access to the country’s developing capital market.

The Collective Investment Schemes Operation Directive No. 1150/2026 was registered and approved by the Ministry of Justice on September 23, the Ethiopian Capital Market Authority said.

The directive, issued under the Capital Market Proclamation No. 1248/2021, sets out requirements for establishing, registering, operating and administering collective investment schemes. It also defines responsibilities for fund operators, custodians and other professional service providers.

The framework covers six types of schemes: money market funds, mutual funds, real estate investment funds, exchange traded funds, alternative investment funds and special designation funds.

Investment schemes will need to be registered with the Ethiopian Capital Market Authority before they can be offered to the public. Their assets must also be held by an independent custodian separate from the operator, while schemes will be required to make continuing disclosures to investors.

Operators and custodians will be licensed under the Capital Market Service Providers Licensing and Supervision Directive No. 980/2024, with the ECMA responsible for supervising registered schemes and their service providers.

Hana Tehelku, director-general of the ECMA, said the rules would help channel savings into productive investments through professional management while strengthening investor protection.

The directive adds another layer of regulation to Ethiopia’s emerging capital market, which is developing new investment products and institutions following the launch of the Ethiopian Securities Exchange in 2025.

Source: FSX Business News