THE BENEFITS FOR LISTING SECURITIES WITH THE DAR ES SALAAM STOCK EXCHANGE IN TANZANIA: THE DAR ES SALAAM STOCK EXCHANGE

The DSE was incorporated in September, 1996 as a company limited by guarantee without a share capital under the Companies Ordinance. The enactment of DSE came as a result of government’s policy of transforming its economy from public government dominated economy to private sector driven economy. The DSE was established by the Capital Markets and Security Authority under the Capital Markets and Securities (CMS) Act of 1994. As of march 2009 fourteen companies listed their shares with the DSE. Out of fourteen companies, three are from Kenya and their shares not only cross listed at the DSE but also at the Uganda Stock Exchange and Nairobi Stock Exchange. The first firm to list shares with the DSE was the Tanzania Oxygen Limited (TOL) in 1998 and was followed by Tanzania Breweries Limited (TBL) in the same year. The DSE has been given mandate to create a legal framework governing the entry into business, conduct and operations of capital markets in Tanzania. The rules and laws are harnessed together with the Capital Markets and Security Authority (CMSA), which is a supreme government body created with a prime role of ensuring palatable environment to establish the DSE, and overseeing the interplay of the entire business as a referee does in any game.
REGULATORY FRAME WORK
There are basically two main laws governing the operation of the securities in Tanzania. The third is emergent one as results from powers conferred to Capital Markets and Securities Authority (CMSA) and the Dar es Salaam Stock Exchange (DSE) by a supreme/basic law. The laws are 1) the capital markets and securities Act, 1994 as amended. This is the basic law which regulates the conduct of business in capital markets and is enforced by the CMSA which is the supreme government institution governing the capital markets and securities 2) the companies Act, 2002. This law regulates a wide range of corporate issues including the formation of companies both private and public.
The law further provides a guide on all matters relating to issuance of securities, rights of shareholders, obligations of directors and governance issues, and is enforced by the Registrar of Companies and 3) rules and regulations made by CMSA and DSE. These are rules and regulations made by the named institutions to carter for various issues regarding the trading of securities and qualifications for listing shares among others. The mandate of creating laws regarding the management of day to day business activities of the stock exchange were conferred to the CMSA and DSE on the realization of the fact that capital markets are sufficiently complex and the speed of changes within the industry is so fast than the ability of the parliament to cope with it through statutory enactments. Through such mandates the CMSA has made more than 14 sets of Regulations to carter for various issues. On other hand the DSE has also made several sets of rules enshrined in a blue print (DSE, 2008; 2003; CMSA, 2008; 2004). Generally, the mandate conferred to the two bodies stands to benefit the firms that list shares with the DSE and investors that purchase securities altogether.