New capital markets guidelines in the pipeline

The Capital Market Authority (CMA), the country’s capital markets regulator, has drafted 12 regulations to support the implementation of the law on capital markets. Robert Mathu, the Executive Director of CMA told Business Times that the regulations include, licencing, complaints, capital market principles fees and discloser guidelines for listed companies. Others include regulation on corporate governance, enforcement guidelines, and compliance guidelines, take over code, cross border introduction and regional bond issuance. “As a regulating body, we have to make sure our stakeholders understand these regulations and their impact on the market,” Mathu said. The CMA board is set to approve the regulations by the end of February 2012. The new guidelines are also set to address challenges in the handling of regional Initial Public Offers (IPOs) and issuance of bonds, particularly when they require approval from capital market regulators within EAC partner States. Mathu added that they are in the process of harmonising capital market regulations in the region. “There aren’t enough savings on the domestic market; but this process is cumbersome, bureaucratic and expensive for those looking to raise investments in the region,” Mathu said. Mathu’s revelations come in the wake of East African Securities Exchange Association’s (EASEA) push for a policy that requires all initial public offers in EAC to be cross-listed on all regional stock exchanges. The association says that payment of shares during the regional IPOs is a challenge, especially since it is bound to foreign exchange risks and transfer charges levied by banks during refunds to investors. gertrude.majyamere@newtimes.co.rw

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New capital markets guidelines in the pipeline