The regional capital markets regulators, under the umbrella of East African Securities Regulatory Authorities (EASRA), have agreed to support the establishment of a Capital Markets Advisory Centre (CMAC) to enhance Small and Medium Enterprises (SME) access to capital.
CMAC is expected to provide technical support to SMEs with a view to developing a credible pipeline of entities able to access private and public market- based finance. When established, the institution’s support is expected to focus on pre-listing, listing and post-listing support services.
To ensure the sustainability of CMAC, EASRA members will engage with private equity, accounting and other associations, development partners, academia, think tanks, and civil society organizations. Partners will be called upon to provide advocacy and technical support.
The decision to set up CMAC was made with the recognition that SMEs need to be supported to access alternative forms of long term capital, thereby reducing their dependence on short term bank financing in order to spur their growth and boost employment. However, most SMEs in the region cannot afford technical services like legal and corporate restructuring.
During the Consultative Committee meeting, the regulators also deliberated on; full implementation of risk-based supervision; regional capacity building programmes through partnership with the Chartered Institute for Securities and Investment to ensure certification of industry players; development of case studies to facilitate capacity-building among regulators; ensuring regulatory and market infrastructure responsiveness to technological changes especially in the Fintech (Financial Technology) space; crisis management in the EAC Capital Markets; and emerging issues in regulatory risk management.
The Consultative Committee further noted the positive progress being made towards harmonization of the legal and regulatory framework for capital markets in the EAC.
EASRA vowed to maintain support to member states in the area of capacity building until they are all at an equal level to support a single EAC investment destination for global investors.
Capital Markets Authority (CMA)-Kenya, Capital Markets Authority (CMA)-Uganda and Capital Markets and Securities Authority (CMSA)-Tanzania entered into a Memorandum of Understanding (MoU) and adopted a common blue print on the integration of the East African Capital Markets in 1997. This MoU formed the basis for the establishment of the East African Securities Regulatory Authorities (EASRA). The Capital Markets Authority (CMA)-Rwanda later joined EASRA in 2009, and the Bank of the Republic of Burundi (BRB) in 2011. EASRA continues to operate as a consultative institutional forum where the regulatory authorities discuss matters of mutual interest that affect their operations.
The main objectives of EASRA are Information sharing among the members; mutual assistance and cooperation between members; and advancing the integration of the East African capital markets. Under the memorandum signed by the regulators, EASRA is mandated to: Develop common capital market strategies; Harmonize capital market laws and structures; Foster regional capital markets development; Facilitate cross-border investments; Develop market infrastructure; Develop policy proposals for capital markets incentives; Develop proposals for the alleviation of impediments; and Develop a common/ similar trading system(s).