The Tanzania Capital Markets Tribunal is an independent body established to handle disputes related to the capital markets sector in Tanzania. It is chaired by a High Court judge and supported by four members with expertise in capital markets.

 It holds the full judicial powers of the High Court. It plays a crucial role in ensuring that market participants, including investors, brokers, and listed companies among others; adhere to the legal and regulatory framework governing securities and investments. The Tribunal provides a fair and impartial platform for resolving disputes, ensuring that market integrity and investor confidence are upheld.

One of the main reasons for the establishment of the Tribunal is to offer a specialized legal avenue for handling conflicts related to capital markets. Unlike regular courts, which may not have the technical expertise required to deal with complex financial matters, the Tribunal is composed of professionals with knowledge of capital markets laws, regulations, and financial transactions. This ensures that disputes are resolved efficiently and fairly.

The Tribunal operates under the Capital Markets and securities tribunal (amendment) rules, 2024, which outlines the legal structure for capital markets in Tanzania. The Capital Markets and Securities Authority (CMSA) is the primary regulatory body responsible for overseeing market activities, ensuring compliance, and protecting investors.

The CMSA has the authority to regulate stock exchanges, licensing of market participants, and enforcing securities laws. It monitors the activities of brokers, investment advisers, and other financial intermediaries to prevent fraudulent practices, insider trading, and market manipulation. If an investor believes that a financial institution or a listed company has violated capital markets regulations, they can file a complaint with the CMSA, which may investigate and take corrective action.

Legal Protections for Investors in Tanzania’s Capital Markets

Investors in Tanzania’s capital markets benefit from several legal protections designed to ensure transparency, fairness, and accountability. One of the key protections is the right to accurate and timely information. Publicly listed companies are required to disclose financial reports, risk factors, and any material changes that may affect investment decisions. This transparency allows investors to make informed choices and reduces the risk of financial loss due to misinformation.

 Another important protection is the prohibition of insider trading and market manipulation. The law prohibits individuals or companies from using non-public information to gain an unfair advantage in trading stocks or securities. Violators face severe penalties, including fines and imprisonment. This helps maintain a level playing field for all investors. Furthemore, investors have access to corporate governance mechanisms that ensure listed companies are managed in the best interest of shareholders. These governance measures include independent board oversight, external audits, and conflict-of-interest policies that prevent unethical business practices. If investors suspect corporate misconduct, they can raise concerns with regulatory authorities or seek legal recourse through the Tribunal.

Dispute Resolution Mechanisms in Tanzania’s Capital Markets

When disputes arise in the capital markets, investors have multiple avenues for resolution. The first step in resolving a dispute is to use internal complaint mechanisms within the financial institution or brokerage firm. Most firms have dedicated customer service departments that handle investor grievances. If the issue is not resolved satisfactorily, investors can escalate their complaint to Dar es salaam stock exchange and if not resolved it should be escalated to the Capital Markets and Securities Authority (CMSA), which has the power to investigate and enforce compliance.

Investors or market participants who are dissatisfied with a decision made by the Capital Markets and Securities Authority (CMSA) have the right to appeal to the Tanzania Capital Markets Tribunal (CMT). The appeals process follows a structured legal framework to ensure fairness and proper handling of disputes. Below is a step-by-step explanation of how an individual can appeal to the Tribunal.

The appeals process begins at the Capital Markets and Securities Authority (CMSA). When an individual or entity believes that a decision made by the CMSA has negatively affected their rights or interests, they can formally challenge it. The CMSA is responsible for determining the case based on relevant regulations, evidence, and legal arguments. After thorough evaluation, the Authority delivers its final decision on the matter.

If a party remains aggrieved by the decision made by the CMSA, they have the right to escalate their case to the Capital Markets Tribunal (CMT). The Tribunal is an independent body that reviews cases appealed from the CMSA to ensure that justice is served fairly and in accordance with the law. A person wishing to appeal to the Tribunal must issue a written notice of intention to appeal within seven days from the date of the CMSA’s decision. The notice must clearly state whether the appellant is contesting the entire decision or only a specific part of it. This step is crucial as it formally informs the Tribunal of the appellant’s dissatisfaction and intent to seek a review of the decision. 

The notice of intention to appeal must be prepared using CMT Form No.1 and signed by the appellant or their authorized representative. The notice should then be submitted in seven copies to the Registrar of the Tribunal. Once the Registrar receives the notice, they will endorse the date of receipt and register all relevant details in the Tribunal’s records. This documentation ensures that the appeal follows due process and is formally acknowledged by the Tribunal.

To officially institute an appeal, the appellant must lodge a statement of appeal within 30 days from the date the CMSA’s decision was delivered. The appeal must be filed using CMT Form No.2 and should include all necessary legal and factual arguments supporting the case. When submitting the appeal, the appellant is required to pay the appropriate fees as prescribed by the Tribunal. Upon receiving the appeal, the Registrar will endorse the date of receipt, confirming that the case has been formally registered for review by the Tribunal.

If a party is not satisfied with the decision of the Capital Markets Tribunal (CMT), they have the right to appeal further to the Court of Appeal of Tanzania. This is the highest appellate court in the country, and its decision is final and binding. The process ensures that appellants have multiple levels of review to seek justice and legal clarity regarding capital markets disputes.

The appeals process in Tanzania’s capital markets is structured to provide investors, market participants, and other stakeholders with a clear path to challenge decisions they find unjust. By following the correct procedures—starting with the CMSA, moving to the Capital Markets Tribunal (CMT) and potentially escalating to the Court of Appeal of Tanzania—appellants can seek fair resolution of their grievances. 

The Tanzania Capital Markets Tribunal serves as a vital institution for protecting investors and ensuring compliance with capital markets regulations. By providing a specialized dispute resolution mechanism, the Tribunal helps maintain market stability and investor confidence. Investors should familiarize themselves with their rights, the regulatory protections available, and the steps they can take in case of disputes. Understanding these legal safeguards can help investors make informed decisions and protect their financial interests in Tanzania’s growing capital markets.

Director Brighton Ross Kinemo (MIoDRT 1930) is the Head of Training and Data Sales at the Dar es Salaam Stock Exchange (DSE). An Associate Member of the Chartered Institute of Securities and Investment (CISI UK) and an Member of Institute of Directors Tanzania (IODT), he is also an alumnus of the Maastricht School of Management (MSM), Netherlands, where he completed a Strategic Leadership Program, and Certificate of Leadership from Uongozi Institute. Reach him at bross@dse.co.tz