Regionalgovernments should take advantage of automation across the East African Community (EAC) stock markets to fast-track the integration of the bloc’s exchanges.

The call was made by a capital markets stakeholders’ consultative meeting in Kigali on Friday. The meeting also discussed the Terms of Reference (TOR), and reviewed progress on the implementation of the EAC capital markets infrastructure integration project that were presented by the EAC’s Financial Sector Development and Regionalisation Project (EAC-FSDRP), and the system’s Pakistani vendors, Intotec Limited.

Speaking at the meeting, Celestin Rwabukumba, the Rwanda Stock Exchange (RSE) chief executive officer,  said the TOR provided for a study on the establishment of a regional stock exchange and hiring a consultant to review and advise on the governance, ownership and source capital and propose a private-public partnership framework for the EAC central securities depositories.

He, however, explained that partner states had agreed that the model of integration of the regional stock exchanges would be by linking national trading platforms and not having one single platform.

"We, therefore, reiterated that there was no need to undertake the studies,” he said.

The meeting also reviewed  the work of the Capital Markets Infrastructure Technical Working Group (TWG). The TWG comprised of representatives from EAC stock exchanges, securities regulators, central banks and central securities depositories.

It was tasked with reviewing work done on the regional central securities depositories and trading platforms to identify gaps that needed to be addressed, make recommendations and ensure implementation of the projects was in line with regionalisation of the capital markets infrastructure.

Rwabukumba noted that the project would allow seamless movement of securities and payments between the different EAC capital markets, compatible at the regional level, thus creating a regional financial market in the EAC.

Sammy Mulang’a, the regional financial policy advisor at the EAC secretariat, underscored the key role financial sector development and integration has in the overall regionalisation agenda, noting that it is one of the key objectives under the EAC treaty.

"The main objective of the programme is to support the broadening and deepening of the financial sector through the establishment of a single market in financial services among EAC partner states to make a wide range of financial products and services available to all at competitive prices,” Mulang’a, who represented the EAC secretary general, said.

Mulang’a noted that the EAC capital markets infrastructure is designed to link the automated trading systems and central securities depositories across the EAC securities markets through a Smart Order Router and CDS interface.

"Once operational, the system will provide investors in EAC with a larger pool of investment opportunities and, at the same time, create an avenue for issuers to mobilise long-term capital in a more efficient and cost-effective manner,” he said.

Mulang’a said similar workshops would be held in all partner states as part of the capital markets infrastructure implementation.

Stakeholders at the meeting agreed that the implementation of the EAC capital market infrastructure be fast-tracked by partner states.