INTERNATIONAL: Regional Integration Initiatives Update

Monday July 27 2015

The East African Securities Exchanges Association (EASEA) held its 25th consultative meeting in Kampala, Uganda on 23-24 July 2015.

The Chairman announced that the Regional Inter-depository Mechanism (RITM) was successfully implemented enhancing regional market efficiency.

The meeting discussed and agreed upon the following issues for follow up and implementation:

1. Regional Integration Initiatives – A Technical Working Group (TWG) was established to review the best infrastructure and legal framework that would facilitate seamless cross broader movement of capital. The TWG has developed a set of Council Directives which has been referred to the legal committee before being submitted to Council Members for approval. These include:

• Council Directive of the EAC on Licensing of Market Intermediaries
• Council Directive of the EAC on Investor Compensations Schemes
• Council Directive of the EAC on Takeovers and Mergers
• Council Directive of the EAC on Anti-Money Laundering in the securities market
• Council Directive of the EAC on Self-Regulatory Organisations
• Council Directive of the EAC on the Conduct of Business for Market Intermediaries.

2. Capital Markets Infrastructure (CMI) Project
In order to attract global capital flows and participate in global capital markets, the EASEA has initiated a project to adopt a mutual, modern technological system that will meet different market needs.

3. Regional Inter-Depository Transfer Mechanism
In order to facilitate movement of cross listed securities the Regional Inter-depository Transfer Mechanism is now in place providing further opportunities for investors seeking cross-border trade opportunities.

4. Regional Cross-Listings
The EASEA will place more focus on regional cross listings to give issuing companies more liquidity and a greater ability to raise capital and expose investors to a greater pool of investments.

Member Updates

Rwanda Stock Exchange (RSE) – Rwanda
The RSE is in the final stages of automation of its trading infrastructure which will be automatically linked to the Central Securities Depository and Real Time Gross Settlement System at the Central Bank of Rwanda.

Dar-es-Salaam Stock Exchange (DSE) – Tanzania
DSE initiated actions that will improve liquidity levels and valuation in 2015 including

• Initiatives to increase new products and services
• Linkage of the DSE_CSD to the national payments system
• Linkage of the DSE_CSD to the Central Banks’ CDS
• Demutualisation and Self-Listing of DSE

Nairobi Stock Exchange – Kenya
The NSE expects to list the following products in 2015

• Derivatives Market
• M-Akiba Retail Bond
• REITS
• ETFs
• Depository Receipts

Uganda Securities Exchange – Uganda
USE became fully automated on 22 July 2015 and is further on course to implement the following initiatives:

• Change trading rules in 2015 with Equity Trading Rules approved and adopted by the CMA on July 17, 2015 while Fixed Income Trading Rules are currently under review.
• Demutualisation of the Exchange.
• Inter-Depository Transfer Mechanism 
• Settlement Cycle to be shortened from T+5 to T+3 with effect from July 22, 2015.
• USE is currently in discussion with the Central Bank in order to trade in Government Bonds on USE’s automated system. This is expected to be in Q4 of 2015.
• Further discussions focusing on linking USE_CSD to the Central Bank’s CDS.

For further details click on the link above