The union government has issued an ordinance that establishes a transition period, lasting from August 1, 2014 through March 31, 2020, for the establishment of the country’s stock exchange – effectively giving the Ministry of Finance regulatory power and oversight of the stock exchange in lieu of an appointed securities and exchange committee.
“The Ministry of Finance will receive special interim rights to run the stock exchange. Myanmar doesn’t have the expertise to establish a stock exchange, so it is being done in collaboration with foreign partners,” an official from the Myanmar Stock Exchange said.
The Securities and Exchange Law (2013) grants the government the right to determine a transitional period before the stock exchange is completely established and operational, and gives it the ability to appoint the Ministry of Finance to regulate the securities business during this period.
Thereafter, the ministry has the right to issue necessary orders and directives to regulate the securities business and allow the Myanmar Economic Bank to setup a joint venture with another non-finance entity to engage in the exchange.
The stock exchange is slated to be launched in October 2015 with 10 companies that have said they will list. But the small number of companies involved warrants cautious observation, economists say.