Kigali, 7th December, 2015… Moves to integrate the regional stock markets are on the right track with the exchanges looking to take advantage of their automation to integrate faster.
This was resolved by the capital markets stakeholder consultative meeting at the Top Tower Hotel in Kigali on Friday.
They discussed among other things the Terms of Reference (TOR) and progress of implementation of the EAC Capital Market Infrastructure (CMI) integration project that were presented by the EAC’s Financial Sector Development and Regionalization Project (EAC-FSDRP) alongside the system’s vendors, Intotec Limited from Pakistan.
Speaking during the meetings, Celestin Rwabukumba, the Chief Executive Officer of the Rwanda Stock Exchange (RSE) noted that the TOR provided for a study of the establishment of a regional stock exchange and hiring a consultant to review and advise on the governance, ownership and source capital and propose a private-public partnership framework for the EAC Central Securities Depositories.
“We reconfirmed that there was no need to undertake the studies as the partner states had agreed that the model of integration of the regional stock exchange would be by linking the national trading platforms and not having one single platform,” he explained.
The meeting further commended the work of the Capital Markets Infrastructure Technical Working Group (TWG) comprising of representatives from EAC stock exchanges, securities regulators, central banks and central securities depositories.
“The purpose of the TWG was to review the work done on Central Securities Depositories and trading platforms and identify gaps that may require additional technical assistance, develop recommendations and ensure their implementation in line with regionalization of the capital markets infrastructure,” Rwabukumba added.
He noted that it would allow a seamless movement of securities and payments between the different EAC capital markets, compatible at the regional level, thus creating a regional financial market in the EAC.
Speaking on behalf of the Secretary General of the EAC, Sammy Mulang’a, the Regional Financial Policy Advisor welcomed the ideas shared during the meeting, adding that more of the workshops will be held in all partner states as part of the Capital Markets Infrastructure implementation.
He underscored the important role the financial sector development and integration has in the overall regionalization agenda, noting that it is one of the key objectives under the EAC Treaty.
“The higher level objective of the program is to support the broadening and deepening of the financial sector through the establishment of a single market in financial services among EAC partner states, with a view to make a wide range of financial products and services available to all at competitive prices,” he said.
He noted that remarkable progress has so far been made in advancing the development and integration of the financial sector and particularly the capital markets in the EAC region.
He singled out the progress in developing the legal and regulatory framework for the EAC securities market with seven Council Directives adopted by the Council of Ministers.
These were gazetted by the EAC Secretariat in 2014.
Mulang’a told the stakeholders that the EAC Capital Markets Infrastructure is designed to create a linkage to the automated trading systems and central securities depositories across the EAC securities markets through a Smart Order Router and CDS interface.
“Once operational, the system will provide investors in the EAC with a larger pool of investment opportunities and at the same time create an avenue for issuers to mobilise long term capital resources for meaningful economic development at a more efficient and cost-effective manner,” he said.
In all, stakeholders agreed that the implementation of the EAC Capital Market Infrastructure be fast-tracked by all partner states.
About the Rwanda Stock Exchange (RSE)
The Rwanda Stock Exchange Limited was incorporated on 7th October 2005 with the objective of carrying out stock market operations. The Exchange was officially launched on January 31st, 2011. Today, there are seven companies listed at the RSE’s Equity market segment and 10 bonds on the Debt market segment. The RSE’s objective is to promote the growth of the capital market in Rwanda in a sustainable and inclusive way for all.