Ethiopia’s capital markets regulator has approved a legal framework allowing collective investment schemes to operate in the country, creating a formal pathway for ordinary Ethiopians to access professionally managed investment products for the first time.
The Ethiopian Capital Market Authority (ECMA) — the body established under Capital Market Proclamation No. 1248/2021 to regulate and develop Ethiopia’s nascent securities market — announced that the Collective Investment Schemes Operation Directive No. 1150/2026 was registered and approved by the Federal Democratic Republic of Ethiopia’s Ministry of Justice on 23 September 2026.
The directive establishes rules for the establishment, registration, operation, and administration of collective investment schemes, and sets out duties for scheme operators, custodians, and other professional parties involved in their management.
“This directive is a significant step in channeling the savings of Ethiopians into productive investment through professional management and strong investor protection,” ECMA Director General Hana Tehelku said.
“It broadens access to the capital market and opens the way for the wider public to share in the country’s economic growth.”
The framework recognises six types of schemes: Money Market Funds, Mutual Funds, Real Estate Investment Funds, Exchange Traded Funds (ETFs), Alternative Investment Funds, and Special Designation Funds.
The range spans relatively low-risk, liquid instruments through to property and alternative asset classes, giving operators flexibility to serve different investor profiles.
Under the rules, no scheme may be offered to the public without registration by the ECMA. Scheme assets must be held by an independent custodian, kept separate from the operator — a structural safeguard designed to protect investors from commingling of funds. Schemes are also required to make ongoing disclosures to the Authority and to investors.
Operators and custodians must be licensed under the Capital Market Service Providers Licensing and Supervision Directive No. 980/2024, and the ECMA will supervise all registered schemes and their service providers on a continuing basis.
The directive arrives as Ethiopia’s capital market infrastructure is still taking shape. The Ethiopian Securities Exchange, the country’s first formal bourse, launched in 2023, and the ECMA has been progressively building out the regulatory architecture needed to support broader market participation.
Collective investment schemes are widely regarded as a critical on-ramp for retail investors in emerging markets, pooling smaller sums to achieve diversification and professional management that individual investors could not access alone.
ECMA said it is ready to work with scheme operators, custodians, investors, and other stakeholders to build a sound and trusted collective investment scheme market in Ethiopia.
