Financial System in Albania
Albania has an asymmetrically developed financial system with banking sector as a more developed pillar and non-banking system which is modestly developed. Thus, as part of the non-bank financial sector, Albania has an almost absent capital market, although many market operators are licensed (brokerage firms, custodians, investment funds, pension funds, life insurance, etc.). On the other hand, despite a clear presence of collective saving schemes (investment funds and pension funds, life insurance schemes) over the last five years, their further development is strictly hampered by the lack of domestic capital market and alternative investments.
Tirana Stock Exchange
For many years, Tirana Stock Exchange (TSE) was the only exchange ever created in Albania. Initially, it was set up as a department of the Bank of Albania (BoA) with the targeting the spin-off after a certain period of time. TSE’s core activity included the primary and secondary market for short-term government debt securities (treasury bills). TSE finally span-off BoA in July 2002, to be established and function as an independent state-owned shareholding company. TSE received the final license to operate as a regulated securities market in 2003 from the Albanian Securities Commission (today AFSA) and renewed it in 2005. However, for various reasons TSE never managed to become a reliable partner for the Albanian business, remaining just a legal concept. Hence, in April 2015, the Albanian Financial Supervisory Authority decided to suspend the license of TSE in the Republic of Albania, in accordance with the shareholders’ decision of the no. 16, dated 07.04.2015.
Albanian Securities Exchange
Albanian Securities Exchange was launched in 2014 by a team of experts on securities and capital markets as an ambitious project with the support of Credins Bank, with the aim of creating a privately-owned electronic trading platform that would match the supply and demand for securities in Albania. This electronic platform would fill the lack of a functional market (stock exchange), where domestic businesses can raise capital as an alternative capital to the banking sector. The project was lobbied to interested stakeholders (domestic and foreign financial institutions) looking for financial support. After that it continued with market research, identification of the electronic trading system to be used, drafting rules and regulations as well as preparing the licensing file to be submitted at the Albanian Financial Supervisory Authority (AFSA). Given the high potential of this project and the favorable conditions for the development of the domestic capital market, in 2016, two other financial institutions namely AK Invest and the American Investment Bank joined the initiative.
Licensing of ALSE
With the decision no. 88, dated 03.07.2017, the AFSA Board licensed the “Albanian Securities Exchange ALSE” s.a., as the first Albanian securities exchange with private capital licensed in the country. The AFSA Board’s decision came after an evaluation in accordance with the requirements of the legislation of all documentation related to the field of activity, capital, the governing bodies of the company, the infrastructure and the technological systems necessary for the realization of it’s activity. Official trading for Government securities (T-Bills and T-Bonds) on ALSE, has started for the first time on February 2018.