DABLO Law Firm LLP has published Collective Investment Schemes in Ethiopia. It is a practical guide to selected requirements of the Directive on the Operation of Collective Investment Schemes No. 1150/2026, issued under the Capital Market Proclamation No. 1248/2021.
In brief: The guide answers 22 key questions on how collective investment schemes in Ethiopia are set up, registered, governed, offered and wound up. It is written for fund operators, banks, custodians, investors and service providers getting ready for Ethiopia’s regulated investment fund market.
Why this Directive matters ?
Ethiopia’s capital market is moving forward quickly, and the Ethiopian Securities Exchange (ESX) is now operating. The Directive is a key building block for pooled investment. It sets the rules for how investment funds in Ethiopia must be structured, who may operate them, how investor assets are protected and when regulatory approval is needed. Anyone planning to launch, manage, distribute or invest in a scheme needs to understand it.
What the guide covers ?
The guide is organised around 22 practical questions in seven areas:
- Legal form, types and set-up: Public Schemes, Alternative Investment Funds (AIFs) and Exchange-Traded Funds (ETFs), and the legal forms each may take.
- Investment policy and restrictions: the approvals needed to change an Investment Policy, permitted assets and securities lending.
- Registration with the Authority: review periods, requests for further information and annual renewal of the Certificate of Scheme Registration.
- Governance and service providers: how the Operator is appointed, rules on related-party transactions and the independent Custodian requirement.
- Offering, disclosure and liability: prospectus requirements and prior approval of advertisements.
- Umbrella Schemes and corporate events: Sub-Schemes, mergers, dissolution and winding-up.
- Quick reference and glossary: a one-page table of key thresholds and time limits, plus definitions of key terms.
Key points at a glance
- Investment Policy changes: a material change requires approval by Security Holders holding at least two-thirds of the Scheme’s capital.
- Registration timelines: the Authority reviews an application within 30 business days, and within 20 business days after it has sent comments. Silence counts as neither approval nor rejection.
- Annual renewal: registration is renewed every year, and the renewal application is due at least one month before expiry.
- Operator stake: the Operator may hold up to 10% of total capital, subject to a two-year holding period.
- Umbrella Schemes: approval of Sub-Schemes must be sought within three months of registration, extendable by three months.
- Sub-Scheme dissolution: a voluntary winding-up requires approval by Security Holders holding 75% of capital.
- Custody: every Scheme must appoint an independent, Authority-approved Custodian.
Who should read it ?
- Asset managers and prospective fund Operators
- Commercial banks considering custodian or distribution roles
- Institutional and private investors
- Boards, compliance teams and professional advisers to Schemes
About DABLO’s Capital Markets Practice
DABLO Law Firm LLP advises on capital-markets regulation, licensing, securities registration, offerings and operational readiness in Ethiopia. The firm has acted as Independent Legal Advisor on the ECMA registration of securities for Awash Bank S.C. and Zemen Bank S.C. It is ranked in Chambers Global 2026 (General Business Law, Band 3) and Legal 500 EMEA 2026 (Tier 2), and highly ranked in IFLR 2026 is a member of LEX Africa.
[Download the guide (PDF)] · [Contact our Capital Markets Team]
This article and the guide provide general information only. They are not legal, financial or investment advice.
