Capital Markets Authority has partnered with other securities regulators in Africa and Middle East as well as Financial Sector Deepening Africa to find ways to increase uptake of capital markets products and grow the number of listed companies.
The agreement was arrived at during the 42nd Meeting of Africa Middle East Regional Committee (AMERC) of the International Organisation of Securities Commissions (IOSCO).
“…conscious of the unique challenges, opportunities and socio-economic markets landscape of the African and Middle East Region, I remain confident that with the growing proactive participation of our members in our own regional priority projects as well as those of the wider IOSCO community, we will continue to leverage increased value from our respective memberships in IOSCO as well as delivering on our national responsibilities to develop and regulate orderly, efficient and effective capital markets,” said CMA’s chief executive, in his capacity as IOSCO/AMERC’s chair, when he officially opened the event.
The Securities regulators aim to increase the number of listed companies in their regions as a solution to the market liquidity problem. Kenya’s NSE has 64 listed companies although some are not active in the market. In comparison, Johannesburg Stock Exchange has more than 300 listed firms while the New York Stock Exchange has more than 2,800 listed companies.
Some of the recommendations made at the meeting include; creating more awareness of the opportunities in capital markets among prospective companies, increasing efficiency in the capital markets, reviewing minimum listing requirements, training market intermediaries, creating incentives for more companies to list, and negotiating favorable tax agreements for listed companies.
The regional committee of securities regulators agreed to work with the UK funded organisation FSD Africa to identify and assist companies to get listed.
According to the press statement released, the regulators discussed “..the need to work towards greater convergence on standards for sustainable finance …”
During the meeting, the regional regulators identified major risks that could hinder growth in securities markets such as; regulatory response to trading crypto assets, systemic matters at the exchange, unfavorable economic environment, and cyber security.
Promoting Fintech innovations such as blockchain technology, creating diverse products such as derivatives, and improving financial literacy are some of the opportunities to grow the capital markets according to the members of the Africa Middle East Regional Committee.
The head of Kenya’s Capital Markets Authority Mr. Paul Muthaura is an official in the International Organisation of Securities Commissions – an institution that unites the world’s securities regulators and sets standards for the securities markets. He is also the chairperson in the Africa Middle East Regional Committee.