The Interim Law on Securities Markets, issued as Coalition Provisional Authority Order No. 74 of 2004, is the legal framework for Iraq’s securities market. It regulates how securities are issued and traded, who supervises the market, and how investors are protected.
Although it was issued as a temporary measure pending a permanent securities law, it remains the main legal basis for the market today. It matters to companies considering a listing or raising capital, to local and foreign investors, and to brokers and other market participants.
Iraq Securities Commission
The law establishes the Iraq Securities Commission as the regulator of the securities market. The Commission:
- licenses and supervises market participants
- sets rules on disclosure and trading
- takes action against violations
Its aim is to protect investors and keep the market fair, efficient and transparent.
Iraq Stock Exchange and brokers
The law provides the legal basis for the Iraq Stock Exchange, where the shares of listed Iraqi companies are traded. Trading takes place through brokers, who must be licensed and must follow the rules on how they deal with clients and execute trades.
Duties of listed companies
Listed companies must disclose the information investors rely on. This includes periodic financial statements and material developments that could affect their share price. Accurate and timely disclosure is central to the law’s purpose of building investor confidence.
Protection against market abuse
The law prohibits practices that undermine the market’s integrity, such as trading on inside information and manipulating prices. These rules protect ordinary investors and support confidence in the market as a whole.
Foreign investors
Foreign investors can buy and sell securities listed on the Iraq Stock Exchange through licensed brokers, subject to the applicable rules and any sector-specific restrictions. This makes the law an important part of Iraq’s framework for attracting portfolio investment.
Why it matters
For any company planning to list, any investor buying Iraqi shares, and any buyer acquiring a stake in a listed company, this law sets the rules of the game. Understanding it, and the Commission’s rules made under it, is essential before entering Iraq’s capital market.