Companies should be alert to significant novelties on the financial market that will start to apply in North Macedonia this upcoming autumn. The Parliament of North Macedonia adopted the new Law on Prospectus and Transparency Obligations for Issuers of Securities (“Prospectus Law”) and the new Law on Financial Instruments (“FI Law”) in March 2024. The Prospectus Law will start to apply on 27 September 2025, while the FI Law will start to apply on 28 September 2025.
The purposes of the above laws include making the financial market of North Macedonia more compatible with European standards, harmonising legislation with EU directives and regulations that cover different aspects of securities, trading, transparency, investor protection and financial markets, and ensuring a complete and modern legal framework.
The Prospectus Law establishes a modern regulatory framework for securities issuance and disclosure. Key takeaways include:
- Standardised Prospectus: Companies can now issue a prospectus as a single document or in multiple parts, simplifying the process;
- Increased Transparency and Investor Protection: Issuers must disclose more financial and corporate governance information to the public, while at the same time there are strict rules for periodic and ongoing reporting, which will enhance the trustworthiness of the market;
- Simplified Public Offering and Market Access: It provides for a streamlined process for companies when it comes to listing securities on regulated markets, and it encourages growth of small and medium enterprises by reducing the regulatory burdens for smaller issuers; and
- Stronger Regulatory Oversight and Digital Reporting: The Securities and Exchange Commission (“Commission”) is solidified as the main regulator and is increasing its powers for regular monitoring and sanctioning non-compliances. It also mandates the use of certain reporting forms prescribed by the Commission for financial disclosures.
Some important points for the FI Law include:
- Introduction of New Financial Instruments: The FI Law introduces derivatives (options, futures, swaps) other structured financial products and money market instruments, creating a market with much more diversified investment opportunities and risk management tools;
- Stronger Market Transparency: It obliges investment companies to act in the best interest of the clients, to disclose key financial information and prevent conflicts of interest. Additionally, it provides for a strengthened anti-market abuse measures and ownership reporting;
- Modern Trading Platforms and Market Access: The FI Law introduces Multilateral Trading Facilities (MTFs) and Organized Trading Facilities (OTFs). These trading platforms enable more flexible trading opportunities and easier access to capital for small and medium enterprises and for investors;
- Establishing the Capital Market Supervisory Authority: The establishment of the Capital Market Supervisory Authority (CAMSA) in North Macedonia introduces an independent regulatory body responsible for overseeing and regulating entities in the capital market. CAMSA should ensure the lawful and efficient functioning of the capital market, protect investors’ rights, and maintain market stability. It will be accountable to the Parliament of North Macedonia and will operate based on principles of objectivity, transparency and non-discrimination.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
