2.1: Leverage East Africa as an integrated market

Measurement
Establishment of the East African single market in financial services and full implementation of a single Capital Market
Working Group
WG4
Implementation Progress

The Authority has participated in the development of the EAC Council Directives which are geared to intergrate the capital markets in the region.
The following Council directives were gazetted on 29 May 2015:
1. EAC Council of Ministers Directives on Collective Investment Schemes
2. EAC Council of Ministers Directives on Admission to Trading on a Secondary Exchange
3. EAC Council of Ministers Directives on Public Offers (Equity) in the Securities Market
4. EAC Council of Ministers Directives on Public Offers (Debt) in the Securities Market
5. EAC Council of Ministers Directives on Regional Listings in the Securities Market
6. EAC Council of Ministers Directives on Asset-Backed Securities
7. EAC Council of Ministers Directives on Corporate Governance for Securities   Market intermediaries

The following were gazetted on 27 October 2017;

8. Directives of the Council of Ministers of the East African Community on Investor Education and Protection
9. Directives of the Council of Ministers of the East African Community on Self-Regulatory Organisations
10. Directives of the Council of Ministers of the East African Community on Takeovers and Mergers
11. Directives of the Council of Ministers of the East African Community on Licensing in the Securities Market
12. Directives of the Council of Ministers of the East African Community on Anti-Money Laundering in the Securities Market
13. Directives of the Council of Ministers of the East African Community on Investor Compensation Fund
14. Directives of the Council of Ministers of the East African Community on Conduct of Business in the Securities Market.

In June 2016, the Authority developed Regulations to transpose into Kenya law Council Directives on Regional Listing, Collective Investments Schemes, Corporate Governance for Market Intermediaries and Public offers of Debt and Equity Securities.The draft regulations to transpose the EAC Council Directives were submitted to the National Treasury in 2016 for gazettement.

The EAC Council Directives on Licensing, Investor Compensation Funds, Investor Education and Protection, Conduct of Business for Market Intermediaries, Takeovers and Mergers, Anti-Money Laundering and Combating of Financial Terrorism, Self-Regulatory Organizations were gazetted on 27 October 2017 for transposition by Partner States

The Directives awaiting gazettement by the EAC for subsequent implementation by Partner States include; Central Securities Depositiries, Securities Exchanges, Corporate Governance for listed companies, Real Estate Investment Trusts, Credit Rating Agencies and Regulated activities.

The Authority is also a member of EASRA that promotes coordination and cooperation in capital markets regulation within the region.
NSE and CDSC are members of EASEA that addresses emerging issues in exchanges and depository institutions. 

The Authority has also been participating in various Regional Technical Working Groups such as harmonization of statistics, investor education, Development of guidelines for Market Makers for Government Securities

Timelines
Continuous
 
Status
In Progress (Behind Schedule)
Measurement
Number of new products introduced.
Working Group
IC
Implementation Progress

Kenya domesticated the regional framework for the issuance of fixed income securities in 2015. This is a continuous process. In June 2016, the Authority submitted to the National Treasury draft regulations that transposed EAC Council Directives.
Below are products developed to promote investment in regional products;

i) Policy Guidance Note on Asset-Backed Securities issued in February 2017
ii) Policy Guidance Note on Global Depository Receipts/Notes issued in July 2017. This will facilitate both inbound and outbound GDRs/Ns.
iii) Online forex trading regulations Gazetted on 1 September 2017
iv) The SLB and Short Selling regulations were gazetted on 12 January 2018.
v) Policy Guidance note on Green Bonds published in January 2019
vi) Policy Guidance note on the Regulatory Sandbox published in March 2019

Timelines
Continuous
 
Status
In Progress (Within Schedule)
Measurement

Number of cross-border trades and settlements. Number of new regional products issued.

Working Group
WG4
Implementation Progress

There have been initiatives through the EAC Capital Markets Infrastucture project (CMI) to link the exchange and depository infrastructure. All the necessary policy and administrative documents have been finalised including draft fee structure, smart order router and matching engines rules, master agreements between CSDs and stock brokers, minimum standards for participation, documentation on linkage of CSDs to RTGS systems and capacity building programs. Although Kenya is participating in the discussion of the project, it is not involved in its implementation.

Timelines
2016-2020
 
Status
In Progress (Behind Schedule)