Region’s capital market regulators seek expansion with inclusion of DRC and South Sudan

This would to foster the development of an integrated East African capital market to drive advocacy, innovation, capacity building, and harmonization of regulations and laws

Kampala, Uganda | JULIUS BUSINGE | The East African Securities Regulatory Authorities (EASRA), comprising regulators from Uganda, Kenya, Rwanda, and Tanzania, have underscored the importance of expanding their organization to include more East African member states, with a particular focus on the Democratic Republic of Congo (DRC) and South Sudan.

During their recent consultative committee meeting held in Kampala, the 52nd of its kind, representatives from these East African nations came together to discuss various critical topics related to capital markets. The meeting was attended by notable figures such as Keith Kalyegira, CEO of Capital Markets Authority Uganda; Wycliffe Shamiah, CEO of CMA Kenya; CPA Nicodemus D. Mkama, CEO of Capital Markets and Securities Association (CMSA) Tanzania; and CMA Rwanda, represented by Carine Twiringiyimana, a Financial Analyst at CMA Rwanda.

In-depth discussions took place within subcommittees specializing in Market Development, Market Supervision, and Legal Affairs. Key subjects on the agenda included regulatory sandboxes, ESG (Environmental, Social, and Governance) practices, Private Equity and Venture Capital regulations, Crowdfunding, and Islamic financing. Particular emphasis was placed on supporting Small and Medium-sized Enterprises (SMEs) through various financial mechanisms.

Keith Kalyegira, the current Chairman of EASRA, expressed the association’s collective vision, stating, “We will extend a formal invitation to DRC and South Sudan to join EASRA, solidifying regional and country roadmaps to further bolster East Africa’s capital markets industry.”

The consensus reached at the meeting included the development of a new EASRA Strategic Plan. This plan, with a vision to foster the development of an integrated East African capital market, aims to achieve this goal through advocacy, innovation, capacity building, harmonization of regulations and laws, and knowledge sharing. Ultimately, it seeks to position the East African Community (EAC) capital market as a respected platform for mobilizing long-term capital for economic development. This Strategic Plan will also serve as a roadmap for EASRA members in the region.

EASRA members also took note of the progress made by Burundi in establishing their capital markets. Additionally, they reaffirmed their commitment to adopting the standards of the International Sustainability Standards Board (ISSB) – specifically, S1 and S2.

Wycliffe Shamiah, the CEO of CMA Kenya, called upon EASRA members to collaborate with accounting professionals and standard-setting bodies in their respective countries to harmonize and promote these standards, concurrently launching awareness and sensitization campaigns.

Recognizing the crucial role of SME financing in fostering market growth, EASRA members pledged to continue developing and harmonizing the regulatory framework. This move is aimed at facilitating the expansion of capital markets across the East African Community (EAC), with a particular emphasis on crowdfunding regulations.

The CEO of CMSA Tanzania highlighted the role of robust legal frameworks in supporting SMEs, as well as the significant improvements in this sector. He also stressed the need for harmonized regulations in Islamic financing and crowdfunding, with a focus on utilizing country-specific legal frameworks to address challenges effectively.

CMA Rwanda showcased the Collective Investment Schemes (CIS) legal framework, which caters to CIS formations under different structures, such as partnerships, companies, trusts, and contractual schemes, thereby strengthening the pool of savings available for economic deployment.

The meeting emphasized the importance of cross-border information sharing to facilitate enforcement actions, in alignment with the emphasis on information sharing among members of the International Organization of Securities Commissions (IOSCO) multilateral memorandum of understanding (MMOU).

The Consultative Committee underscored the collective responsibility of EASRA members in the development of EAC Capital Markets, firmly committing to the harmonization of legal and regulatory frameworks to ease capital raising and investing across the region.

The East African Community member state economies possess unique features and abundant natural resources, including oil, gas, minerals, infrastructure projects, goods and services, manufacturing, and industry. Capital markets are poised to play a pivotal role in bolstering their growth.