If Burundi joins the East Africa Securities Regulators Authorities, companies and individuals in the country will be able to participate in East African regional Initial Public Offerings (IPO) without discrimination.

This will make it easier for them to cross list their shares on any regional stock exchange, says Fratern M. Mboya, chief executive officer of the Tanzania Capital Markets and Securities Authority.

Mboya explained that Burundi, which currently does not have a capital market, will not need to waste resources and time developing its own legal framework since these will be harmonized throughout the region.

"They will not have to come up with a new act,” he said. "We are going to come up with a single prospectus and certification programme.”

The chief  executive officers of the regulatory authorities will send a team—including East Africa’s principal economist, Tharcisse Kadede, a Rwanda Capital Markets Advisory Council representative and an EASRA chairperson—to speak with the Governor of the Central Bank of Burundi, Gaspard Sindayigaya, next month about the possibility of joining.

The regulators, who aim to have a regional capital market harmonization by the end of 2009, said at their 26th consultative meeting at Hotel des Mille Collines from August 6 to 7 that representatives will discuss EASRA’s goals and objectives and explore opportunities for mutual assistance in the region. 

EASRA was established in 1997 when Tanzania, Kenya and Uganda signed a memorandum of understanding to share information and ensure mutual assistance and cooperation between members to develop capital markets institutions.

It also aims to advance integrating the East African capital markets.

Mboya said that there are still issues to be sorted out by the securities regulators, especially in the area of which integration model should be adopted.

Rwanda’s CMAC joined EASRA on March 20 this year, leaving Burundi as the only East African country non-member.

Despite the lack of a capital market, Burundi has recently expressed interest in forming one. Japheth Katto, chief executive officer, Uganda Capital Markets Authority (CMA), said there is a lot for Burundi to gain if it joined the regional capital market regulators association.

He said the Burundians will be able to save and invest their money in any of the five East African Community countries.
EASRA chairperson Stella Kalonzo said that Rwanda’s capital market should be an example to Burundi because of the benefits experienced since it became a member.

At last week’s meeting, the consultative committee also noted the crucial importance of public education and partnership with the media in the development of capital markets. 

For the capital markets in the region to play a vital role in the free mobility of resources and capital allocation, a concerted effort must be made to have all the member countries in the East African region join the association, EASRA said in a press release.

Since its inception, members have harmonized cross border listing rules. With the exception of CMAC, all EASRA members are members of the international organization of securities commissions (IOSCO), a body made up of the world’s securities and derivatives regulators.

EASRA said it hopes that Rwanda will join the international organization securities commission soon.

Ends