Regional bourses eye integration

April 5, 2011

, NAIROBI, Kenya Apr 5- The integration of the regional capital markets has inched a step closer as the East African exchanges adopted proposed procedures to promote the issuance of regional bonds.

Under the umbrella of the East African Securities Regulatory Authorities (EASRA), the regional bourses have taken on board draft proposals to issue bonds across the east African community to deepening participation in the capital markets.

Commenting on the latest development, EASRA Chairman Robert Mathu said issuance of regional fixed income securities was key to creating an opportunity for issuers to tap into the regional debt capital market.

The decision to integrate the capital markets is in line with the provisions of the East African Community (EAC) Common Market Protocol that provide for the free movement of capital in the region.

‘’Free movement of capital is expected to significantly boost trade and investments, thereby making the region more productive and prosperous,” Mr Mathu said.

Among the proposals up for discussion include eligibility for corporates to issue bonds, the minimum size of bond issues, and disclosure requirements to help regulators assess the financial position of issuers.

Mr Mathu said there was appetite from investors for regional bonds and adoption of the proposed procedures is a step towards offering a value proposition to the region’s debt capital market.

“The next step is to take the proposed requirements for regional bond issues through respective country level consultation and approval process for the proposed regulations to ensure input from all stakeholders and sensitisation,’’ he said.

The committee also adopted a Work Plan geared towards fast-tracking capital markets integration. Some of the highlights of the plan include; effective protection of cross-border investments and allowing East African Community investment service providers & market intermediaries to offer their services across borders.

The regulators also agreed on the need to create a legal framework to facilitate commodities and futures exchanges in the region.

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