BEIRUT: Lebanon’s Parliament approved Thursday the long awaited capital market and insider trading laws that are seen as crucial to revitalizing the financial market. “This is an import step we took today. At last Lebanon will have a vibrant capital market that will be supervised by an independent watchdog that will be headed by Central Bank governor Riad Salameh,” MP Yassin Jaber told The Daily Star.

The draft law has been sitting on Parliament’s shelves for the past five years but has been amended many times in accordance with the latest developments around the world.

Lebanese companies and investors have been pressing successive governments to pass the capital market law, arguing that many countries in the region have surpassed Lebanon in capital market laws and regulations.

Experts stress that an independent capital market will draw funds from both Lebanese and foreigners.

The watchdog will consist of seven members – five of them from the private sector.

“I can’t really tell when this capital market [law will] kick off, but we hope that it will happen at the end of this year. We need to appoint the five independent members as well as find a location for the regulatory body,” Jaber said.

According to the Central Bank, the draft law passed by Parliament was aimed at setting up an independent body to regulate and supervise capital markets. “The National Council for Financial Markets in Lebanon” would organize, regulate and control these markets, the participants and the trading of securities. This agency would enjoy a large degree of autonomy in setting its policies and its functions would be similar to those of the U.S. Securities and Exchange Commission, in parallel with those of the Banque du Liban regarding monetary control issues.

“All these regulations, legislation and draft laws would eventually create an adequate legal framework conducive to the organization and development of financial markets, in tune with international standards and norms. In fact, well-functioning and transparent capital markets would be a powerful tool for Lebanon to share in the expected benefits of globalization,” the Central Bank said.