Sep. 10, 2015


Dr. Ghaleb Mahmassani

Lebanon

Dr. Ghaleb Mahmassani

Vice-President, Beirut Stock Exchange (BSE)

TBY talks to Dr. Ghaleb Mahmassani, Vice-President of the Beirut Stock Exchange (BSE), on technology upgrades, attracting investors to the BSE, and encouraging firms to go public.

BIO

Dr. Ghaleb Mahmassani obtained a Bachelor’s degree in Political Science from the American University in Beirut in 1962, with licenses in French and Lebanese law in the same year. He received his PhD in Law from Lyon University in 1966. As well as being the Vice President of the Beirut Stock Exchange, he has been an Attorney at Law and Legal Counsel since 1962, and an Arbitrator since 1976, and has been active both academically and professionally at the international level. He served as a Member of the International Court of Arbitration of the International Chamber of Commerce (ICC) in Paris from 2000 to 2005.

In March 2014, the BSE signed an agreement with Euronext for the implementation of a new trading application platform. What is the importance of this new system and how does it contribute to enhancing the credibility of the local financial market?

From a technical perspective, the BSE has always been well structured and our technical infrastructure is being constantly up-dated to match the highest international standards. Currently, the BSE is using the NSC-UNIX trading system, which is developed and used by Euronext. In addition, we adopted an online trading system and developed an up to date website to provide our investors an easy use search engine for market data and listed companies' information. Recently, we signed an agreement with EURONEXT to set up an advanced, state-of-the-art, electronic trading system in the coming two years that will improve the technical performance of the market and support the expected growth in equity listing and the entry into new asset classes in the Lebanese markets.

What steps are being taken to promote the financial markets in Lebanon and attract more institutional investors to the BSE?

In an effort to foster the development of the financial markets in Lebanon, the Lebanese Parliament endorsed law #161/2011 in August 2011; I participated in different panel discussions of the law in the parliament, and suggested many amendments to it. The law has been drafted according to recognized international standards, and aims to develop sound and transparent financial markets in Lebanon. It is expected to boost the activity of the Lebanese financial markets, increase its transparency, its liquidity, as well as its efficiency. The new law governs all operations related to the issuing, purchase, sale, or promotion of financial instruments that are directly offered to public subscription and that are listed or traded on the stock exchanges. The market authority will be entrusted to issue rules in relation to the operation of financial markets, to regulate the IPO process and the listing of financial products, as well as to look into ownership issues where listed companies are involved. Moreover, it has power to award licenses and authorizations, particularly to financial rating agencies, collective investment schemes, financial intermediation companies, stock exchanges, and companies that offer consultancy and other services relating to financial products to the general public. It monitors financial markets, conducts investigations, issues sanctions, and prompts criminal proceedings where necessary. It also identifies the publications, disclosures, and information to be provided by the listed companies to the investors. In addition, the new law provides for the establishment of the Financial Market Court to which the Chairman and members must devote their time. Finally, the new Financial Market Law takes into consideration the privatization of the BSE by turning it into a Lebanese joint stock company in the first stage, to be established in Beirut and dominated “Beirut Stock Exchange SAL," and in a later stage assigning its shares to third parties from the private sector, through a public or private offering, pursuant to a decision of the Council of Ministers

Most Lebanese businesses, industries, and services are family owned. How does the BSE work to educate entrepreneurs on the importance of disclosing their activities and raising capital through the stock exchange?

Lebanese businesses, both in the commercial and service sectors, are, in the vast majority, small family-owned firms that prefer to finance their activities through bank credit in order to keep control over their companies. However, the BSE Committee is trying to correct the current situation by giving increasing attention to educational and promotional programs that aim to attract and convince medium-sized Lebanese companies to list their shares on the BSE and to increase their capital through the broadening of the shareholder base, by highlighting the importance and advantages of financing through the stock exchange.

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