The Ethiopian Capital Market Authority (ECMA) has announced that the Collective Investment Schemes (CIS) Directive has been officially registered and approved by the Ministry of Justice. Regulatory authorities describe this milestone as a pivotal shift that transitions the capital market from establishing foundational institutions to directly engaging everyday citizens through collective investment tools.
The Collective Investment Schemes Operations Directive No. 1150/2026 completes the legal framework governing mutual funds, money market funds, real estate investment funds (REITs), exchange-traded funds (ETFs), and other collective investment structures within the country.
The directive is issued pursuant to the Capital Market Proclamation No. 1248/2021, which established the ECMA as the sole regulatory body for the Ethiopian securities market.
In a statement announcing the registration of the directive, ECMA Director General Hana Tehelku noted, “This directive is a major step toward channeling Ethiopian savings into productive investments through professional management and robust investor protection.” She added, “It not only broadens accessibility to the capital market but also opens up opportunities for the general public to participate in the nation’s economic growth.”
As previously reported by Capital, when the framework was undergoing final legal review by the Ministry of Justice, Hana pointed out that the mechanism would allow “teachers, farmers, or small business owners to entrust their savings to licensed professional managers.”
The directive focuses on six types of collective investment schemes: money market funds, mutual funds, real estate investment funds, exchange-traded funds (ETFs), alternative investment funds, and special-purpose funds.
Key structural safeguards include provisions mandating that scheme assets be held by an independent custodian separate from the manager, alongside rules requiring continuous reporting to investors.
The governance requirements within the directive reflect international best practices tailored to Ethiopia’s local context. Board members of scheme managers must possess core competencies in fund management, financial services, law, auditing, risk management, and regulatory compliance. Furthermore, independence requirements prohibit close affiliations with entities that could pose conflicts of interest.
Authorities expect the collective investment framework to bridge existing gaps by creating accessible investment instruments that do not require individuals to directly navigate the securities market. The inclusion of real estate investment funds—similar to REIT structures found in other markets—will enable investors to participate in large-scale property developments while providing developers with expanded sources of capital. Money market funds will likewise offer savers flexible alternatives beyond traditional bank deposits.
The Authority stated that it will regulate registered schemes and their service providers, affirming its readiness to collaborate with managers, custodians, investors, and other stakeholders to build a trusted collective investment market.