The Capital Markets and Securities Authority (CMSA) said in Dar es Salaam on Wednesday that it will start sensitizing the public and investors about the alternative stock market, prior to its launching.
The Authority wants to launch Enterprise Growth Market (EGM) segment on the Dar es Salaam Stock Exchange (DSE) later this year to enable companies to acquire start-ups capital. CMSA’s Manager for Public Relations Charles Shirima said the authority is looking on the training nominated advisors (Nomads) as well as educate investors and general public before inaugurating the EGM.
“We are also looking forward to train the Nomads to build capacity for them to assume their roles professionally and effectively in this new and sensitive segment of the market…on other hand investors and the public need to understand the EGM and assess the risks before deciding to invest,” he said.
Mr Shirima said the authority has received a number of inquiries from potential investors even before the alternative market has started to operate. “In terms of numbers, I cannot be precise as inquiries are not only being directed to CMSA but also to DSE and to potential advisers and other market players,” Mr Shirima said, noting that the Nomads are expected to play a great role in sensitising companies to list through the EGM.
Last September CMSA released names of four firms which had applied for Nomads role at the stock market. “Four applications were received and in the mean time the process of issuing license to the potential advisers is on the final stage,” Mr Shirima said. The approval of the firms is set to pave way for the creation of the EGM, which will have less stringent listing regulations compared to the main market.
The Nomad firms need to pass six conditions to get CMSA approval which include having minimum capital of 2bn/-. The Nomads are a new category of advisors particular to the EGM. Their role is to act as a full time consultant to startups, small and medium enterprises aiming at raising capital through EGM.
The Nomad is expected to guide the company from inception all the way until the company exits EGM to the main investment market segment. They also acts as the regulator’s eye and ears in the company, thus espousing investors’ confidence in investing in such young enterprises.
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