Law Office Lazarov Attorney-at-Law Anja Jovanoska discusses Banking and Finance in North Macedonia in the year past and the one ahead.
CEELM: Over the past year, which areas of banking and finance work have been generating the most activity for lawyers in North Macedonia?
Jovanoska: Over the past year, the banking and finance sector in North Macedonia has seen increased legal activity largely driven by regulatory alignment with European Union standards. The country has been harmonizing its financial legislation with EU directives, particularly through the adoption of the Financial Instruments Law and the Prospectus and Transparency Law in 2024, which has generated significant demand for legal expertise in compliance, disclosure obligations, and capital markets transactions. The most active areas for lawyers have included compliance with new capital markets rules, debt restructuring, and project finance transactions, supported by ongoing regulatory modernization and growing investor interest.
CEELM: Are you seeing any shifts in the balance between traditional bank lending and non-bank or alternative financing, and how is that affecting the market?
Jovanoska: While traditional bank lending continues to dominate the North Macedonian market, there has been a gradual but noticeable shift toward alternative financing mechanisms. In March 2024, the Parliament of North Macedonia adopted the Financial Instruments Law and the Act on Prospectus and Transparency Law in order to harmonize the domestic capital markets framework with key EU legislation, including the Directive II EU regulation. The new regime – applicable as of October 1, 2026 – replaces the outdated Securities Act of 2005 and represents a major step toward EU alignment, strengthening investor protection, transparency, and regulatory oversight. The Financial Instruments Law expands the list of regulated financial instruments to include a broad range of derivatives (such as options, futures, swaps, forwards and contracts linked to commodities, emission allowances, or economic indicators), introduces new trading venues alongside the stock exchange – namely Multilateral Trading Facilities and Organized Trading Facilities – and establishes a new category of Data Reporting Services Providers, including Approved Reporting Mechanisms, Approved Publication Arrangements, and Consolidated Tape Providers, to enhance the quality and availability of market data. The law establishes clearer rules for investment firms, market operators, reporting obligations, and supervisory mechanisms, while enhancing safeguards against market abuse. For its effective implementation, 33 accompanying by-laws have been adopted, regulating licensing requirements, organizational standards, conduct of business rules, reporting procedures, and supervisory practices. These by-laws, issued by the Securities and Exchange Commission of North Macedonia, provide the technical and operational details necessary for market participants to comply with the new framework.
The Prospectus and Transparency Law introduces a modular prospectus structure (registration document, securities note, and summary), enabling simplified and faster capital raising –particularly for frequent issuers and growth companies – while also imposing stricter sanctions for non-compliance, including fines of up to 5% of annual turnover or twice the profit gained or loss avoided for serious breaches. The legislation further strengthens market integrity rules, imposes enhanced and more detailed reporting obligations on issuers, and establishes the Capital Market Supervisory Authority as successor to the Securities Commission, with clarified supervisory powers aimed at ensuring the lawful, transparent, and efficient functioning of the capital market.
CEELM: Have any recent regulatory or supervisory developments started to affect banks or financial institutions in practice, and how are they adapting?
Jovanoska: As the process of adopting and implementing the new regulatory framework is still ongoing, many of our clients remain uncertain about their ability to timely align their daily operations with the upcoming requirements. Financial institutions are likely to face substantial adjustments, including investments in new technologies or upgrades to existing systems in order to ensure transaction and settlement finality in line with EU standards, which may require considerable financial and human resources – particularly for smaller market participants. The introduction of more rigorous rules will also result in heightened supervision by both domestic and EU regulators, potentially leading to more frequent audits, compliance reviews, and exposure to sanctions, thereby increasing operational burdens and costs. In addition, institutions may need to revise their trading systems, clearing arrangements, and contractual documentation to comply with the new legal framework, which could cause implementation delays and operational disruptions. Overall, the transition to a stricter regulatory regime significantly raises the risk of fines and penalties, especially for those institutions that are slow or insufficiently prepared to implement the required changes.
CEELM: Looking ahead, where do you expect activity to pick up in the market, whether in new lending, refinancing, or alternative financing? Why?
Jovanoska: Looking ahead to 2026, I expect increased activity, particularly in sustainable and SME lending, as well as in refinancing transactions, driven by digital innovation and closer alignment with EU regulatory standards. As banks enhance their digital capabilities and streamline lending processes, access to financing – especially for small and medium-sized enterprises – should become faster and more efficient. At the same time, growing competition and a stronger focus on ESG and sustainability are likely to support the development of green financing and alternative funding solutions, contributing to a more dynamic and diversified market.
This article was originally published in Issue 13.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
