Regulating and Developing Capital Markets in Lebanon

Project Development Objective (PDO)

The objective of this project is to assist in improving the regulatory and supervisory capacities of Lebanon’s newly established Capital Markets Authority (CMA), which is responsible for overseeing and developing capital markets in Lebanon.


One of the factors that has contributed to the limited growth of capital markets in Lebanon is the absence of an independent regulator. Currently, the Bank of Lebanon (BDL) is responsible for regulating capital markets, and the Banking Control Commission (BCC) performs supervisory duties.
In 2012, the Capital Markets Authority (CMA) was established by law. Lebanon’s CMA has broad responsibility for market regulation, investor protection, and market development. The CMA has regulatory and supervisory authority over capital market activities, including the Beirut Stock Exchange. The World Bank Group has provided assistance in establishing a short- to medium-term roadmap for CMA operation in Lebanon. Although this roadmap outlines immediate priorities that will inform the CMA’s required areas of expertise, the CMA will need further assistance implementing the roadmap’s priorities. Among those are (a) reviewing current regulations as they pertain to capital markets, (b) benchmarking those regulations against international best practices, and (c) amending the regulations as appropriate for the Lebanese market.


The main outputs of the project are as follows:
     1.  Building the capacity of CMA staff members, board members, sanctions committee members,
          and members of the dedicated capital market court; assisting with the organizational
          structure review and training of CMA staff members

     2.  Providing technical assistance to support drafting new and amended regulations, policies, and
          procedures in accordance with the law (in areas such as licensing, market conduct, prudential
          rules, corporate governance, disclosures, public offerings and private placements, mergers and
          acquisitions, and anti-money laundering)

     3.  Designing a master plan for the development of capital markets

Expected Outcomes

The main expected outcomes of the project are as follows:
     1.  Transitioning regulation and supervision of capital market activities from the BDL and BCC to
          the CMA
     2.  Enhancing technical capacity of CMA staff and board members
     3.  Establishing higher standards of regulatory quality, supervisory effectiveness, and investor
     4.  Coordinating effectively with local regulatory agencies and with international regulators,
          including members of the International Organization of Securities Commissions
     5.  Establishing a credible and respected regulatory authority
     6.  Creating capital market development programs that are well articulated and that align with
          broader economic reforms that aim to create jobs (in particular deepening financial
          intermediation functions that meet the needs of the private sector)
     7.  Improving investor confidence and market and business conduct