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Capital Market Development for Maldives

The Special Advisory Services Division (SASD) has for sometime been providing technical assistance to the Maldives in implementing a series of measures for the establishment of capital markets. The project aims to assist the Government in the development of a legal and regulatory framework for capital market activities including: the establishment of a stock exchange and a new securities law; an updated companies law; a new law to regulate fund management and collective investment schemes. The objective is to help the Government to achieve greater economic efficiency by strengthening the role of market forces and the private sector and to develop domestic capital markets. Maldives does not have a fully fledged stock exchange and needs to put in place an appropriate regulatory and institutional structure to regulate trading in shares and securities. SASD began work on this project during 1996 and inputs and assistance in this project are continuing.

Since April 2002 the Capital Markets Development Section of the Maldives Monetary Authority has, as initial interim measure, instituted a trading floor for trading and transfer of shares which is showing a progressive increase in share transactions.  

One of our key tasks currently on this project is the design of the new regulatory and legal regime to regulate fund management and collective investment schemes in the form of mutual funds or open ended investment companies and the preparation of a government policy paper on collective investment schemes and a new CIS law. As Maldives does not have the underlying law of trusts based on the English common law system or a codified modern law of trusts, another important outcome is to prepare appropriate trust law provisions as part of the new CIS legislation to provide for the efficient regulation and operation of trustees and unit trust schemes.