Interview: Nezha Hayat
How has regulatory reform equipped the AMMC to better serve local and foreign investors?
NEZHA HAYAT: Taking into account the expanded mission and upgraded capacities of the AMMC, a strategic plan is being implemented that will boost confidence, promote financial literacy, develop regulations adapted to market dynamics, and increase the capabilities of operators and savers. Protecting savers and investors by building a transparent market with equal access to information is a central AMMC pillar, and will require the putting in place of a dissuasive penalty system.
It is important that regulations create an environment that encourages and protects financial innovation. In addition to introducing new instruments and modern market infrastructure, we must use multiple channels to promote international openness. Memoranda of understanding, membership in international bodies and the technical committees of the International Organisation of Securities Commissions can help improve the market’s appeal to local and foreign investors. The AMMC will also make efforts to cultivate best practices and review resources in order to align them with regulatory changes, international standards, and incurred and potential risks. Generally speaking, we hope to apply these regulatory functions while also focusing on market development.
How can the market’s attractiveness be enhanced?
HAYAT: To enhance the attractiveness of the market, we are in the process of broadening the range of financial instruments to include exchange-traded funds, real estate investment trusts and sukuk (Islamic bonds). We are also trying to stimulate new market activities and segments by creating an alternative market for small and medium-sized enterprises, and a dedicated compartment for qualified investors. We also plan to allow for the issuance of equity in foreign currencies, create an appropriate framework for crowdfunding activities and enact other measures. The attractiveness of the market is closely linked to its liquidity. We are conscious that substantial liquidity can only come from a diversified domestic and international investor base, including both retail investors and a range of institutional investors with different investment horizons and perspectives. Hence, the AMMC is actively involved in growing the retail investor base through the development and implementation of a financial education strategy, while at the same time ensuring the presence of a suitable investor-protection scheme and the existence of mechanisms to facilitate access to markets.
Another solution to the liquidity issue could be to create a regional marketplace. This involves harmonising regulatory standards across the participating countries, facilitating cross-border issuance and investment, and establishing technical links between the markets.
In line with this goal, the AMMC has strengthened its relationship with other securities regulators from the African continent, in order to establish an appropriate framework for the development of cross-border activities under secure conditions.
What are the main initiatives supporting the development of green finance in Morocco and Africa?
HAYAT: Morocco has made a commitment to sustainable development and is positioning itself as one of the major actors in the global energy transition, especially on the African continent. Since hosting the COP22 UN Conference on Climate Change in 2016 Morocco has raised its target for the share of electricity produced by renewable energy to 42% by 2020 and 52% by 2030. The Marrakech Pledge for fostering green capital markets in Africa, launched by the AMMC and the Casablanca Stock Exchange during the event, represents the first commitment by regulators and stock exchanges to promote green capital markets in Africa. Today, the pledge is a platform that allows 19 African regulators and stock exchanges representing 26 countries to share their experiences and promote green finance.