Over the years, Mozambique has witnessed a series of regulatory reforms, largely through notices published by the Bank of Mozambique. Designed to strengthen the financial system, these notices have reflected what appears to be a clear intention on the part of the central bank to reinforce and improve the functioning of the national financial system, as well as to increase transparency and create conditions for the further development of the capital market. Against this backdrop, the publication of Notice No. 03/GBM/2026 by the Bank of Mozambique — published in the Official Gazette on 2 June 2026 — represents one of the most recent initiatives in the area of investor protection and the modernisation of financial intermediation in the securities market.
Although a superficial reading of the notice might initially suggest a technical instrument focused solely on investor classification and the duties of financial intermediaries, its significance extends well beyond that operational dimension. The document establishes the foundations for a more transparent, safer and better-equipped market to support the growing participation of retail and institutional investors, at a time when the Mozambican capital market is seeking to play a more meaningful role in financing the economy.
As such, more than a straightforward regulatory update, the notice suggests a regulatory intention to gradually align the Mozambican framework with international best practices in investor protection.
Not All Investors Are Equal
The fundamental underlying principle is relatively straightforward: different investors possess different levels of experience, knowledge and financial capacity and should therefore benefit from different levels of regulatory protection. To give effect to this objective, the notice establishes two distinct investor categories:
Professional investors and non-professional investors.
Non-professional investors will be subject to enhanced protection mechanisms, including suitability assessments, heightened disclosure obligations and limits applicable to certain financial products considered higher risk or more complex. Professional investors, on the other hand, are deemed to possess sufficient experience, knowledge and financial capacity to understand the risks associated with their investment decisions and may therefore benefit from a more flexible regime.
“One of the principal features of the notice is the increase in responsibilities assigned to financial intermediaries — banks, brokers and other authorised entities.”
A detailed examination of the requirements underpinning each investor category reveals that the differentiation is not a mere bureaucratic formality. On the contrary, it represents one of the fundamental pillars of modern financial market supervision models and seeks to ensure that investors receive a degree of protection commensurate with their circumstances.
Duties of Financial Intermediaries: What Changes?
One of the principal features of the notice is the increase in responsibilities assigned to financial intermediaries. Banks, brokers and other authorised entities that qualify as ‘financial intermediaries’ are now required to develop a more thorough understanding of their clients. Understanding the investor’s risk profile and the duty to ensure that the products offered are appropriate to the client’s characteristics and objectives now take on particular prominence within the scope of the commercial relationship established.
With the aim of promoting more informed investment decisions — and reducing the likelihood of situations in which investors acquire a financial product without genuinely understanding the associated implications — the notice requires financial intermediaries to provide their clients with detailed information on:
The characteristics of the products offered; the risks associated with the financial instruments; costs, commissions and charges related to intermediation services; conflicts of interest; and order execution policy.
In this way, Notice No. 03/GBM/2026 appears to reflect an alignment with the global trend observed following several international financial crises, in which it became clear that a significant portion of investor losses resulted from shortcomings in the provision of complete and adequate information by financial intermediaries and from the marketing of products unsuitable to clients’ risk profiles.
Safeguarding Investor Assets
While the classification of investors represents the most visible dimension of the notice, it is a means to an end rather than an end in itself. The proper categorisation of investors is a necessary step towards their effective protection. However, the document includes a set of additional provisions that may prove even more significant in the medium term: the rules relating to the segregation and protection of investor assets, applicable to financial intermediaries.
Trust that invested assets are adequately protected must be a given.
Article 17 requires financial intermediaries to keep investor assets properly separated from their own assets, while also restricting the possibility of using clients’ financial instruments for their own benefit — or for the benefit of third parties — without prior express authorisation. At first glance, these requirements may appear to be purely operational in nature. However, they constitute one of the fundamental pillars of confidence in financial markets. Investor protection does not consist solely of ensuring that investors understand the risks associated with their investments; above all, it requires confidence that the assets invested are adequately safeguarded by financial intermediaries.
It is precisely at this point that it becomes instructive to look at the European and Portuguese experience.
Parallels with Regulation in Portugal and Europe
In Portugal, and more broadly across the European area, the regulatory focus on investor protection has become increasingly evident over recent decades. The principles commonly applied rest not only on the segmentation of investors between professional and retail clients, but also on stringent rules governing the safeguarding of client assets, asset segregation, operational controls and the mitigation of conflicts of interest. Portuguese — and European — regulation has evolved towards defining requirements for the segregation of investor assets through specific safeguarding mechanisms designed to minimise the risk of loss in the event of insolvency or financial difficulty on the part of financial intermediaries.
The underlying principle is straightforward: client and investor assets must not be commingled with those of the financial intermediaries that manage them. In Portugal, the central pillar for the practical application of investor protection is the Securities Market Commission, known as the CMVM. The Securities Code establishes, in Articles 304 and 306, the principles that financial intermediaries must observe in relation to the safeguarding of client assets.
In this context, the CMVM introduces a requirement for external auditing, obliging financial intermediaries to submit their safeguarding procedures to an annual examination conducted by an independent external auditor duly registered with the Portuguese Institute of Statutory Auditors (OROC). The results of this audit are subsequently submitted to the CMVM via a compliance report, the standard structure and technical execution rules of which in Portugal are defined by OROC’s GAT 17, which has been in application since 2019. Although Notice No. 03/GBM/2026 has a different scope and does not yet introduce the requirement for external auditing, the underlying objective serves a similar purpose. In both cases, the aim is to ensure that investor confidence does not depend solely on the financial soundness of institutions, but also on the existence of operational and regulatory mechanisms that effectively protect their investments.
“The aim is to ensure that investor confidence does not depend solely on the financial soundness of institutions.”
A Practical Example
The true relevance of these matters becomes more evident when examined in a concrete context. In recent months, there has been broad discussion in Mozambique about the need to deepen the domestic capital market and to increase the participation of state-owned and state-linked enterprises in financing mechanisms through the stock exchange.
Consider a scenario in which, over the coming years, a strategic state enterprise decides to offer a portion of its capital to investors through the Mozambique Stock Exchange (BVM). Such a scenario could attract investment from a wide range of citizens into shares of that company, many of them without prior experience in equity instruments.
In this context, confidence in the system becomes paramount — and it is precisely here that Notice No. 03/GBM/2026 assumes strategic importance. Without robust investor protection mechanisms, the expansion of the capital market may prove limited. Conversely, the greater the confidence investors have in the strength of the regulatory framework, the greater their participation in future market transactions is likely to be.
What Comes Next?
It would perhaps be an overstatement to claim that Notice No. 03/GBM/2026 places Mozambique on a par with the world’s most sophisticated financial markets in terms of investor protection. But it would be equally unfair to underestimate its reach. By introducing formal rules for investor categorisation, reinforcing the duties of financial intermediaries and establishing mechanisms for the segregation and protection of client assets, the Bank of Mozambique is building an essential regulatory foundation for the future expansion of the domestic capital market.
At a time when the country is seeking to mobilise domestic investment, develop new sources of financing and strengthen the role of the Mozambique Stock Exchange in the economy, investor confidence may become one of the financial system’s most valuable assets. And that confidence begins, precisely, with the assurance that investors are adequately protected.
While it is difficult to predict what the next chapter in the evolution of investor protection in Mozambique will look like, the international experience can serve as a source of inspiration. In parallel with the definition of new rules, the establishment of control mechanisms aimed at assessing compliance with those rules by financial intermediaries is of equal importance. In this regard, a requirement for external auditing to assess compliance by financial intermediaries with the requirements introduced by Notice No. 03/GBM/2026 appears to be a logical candidate for the next chapter.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=538729
