Securities regulators in Africa and Middle East resolve to collaborate to increase listings in the region and to mitigate shared risks
Kuwait City…23 January 2019....Securities regulators in Africa and Middle East have approved a joint project with Financial Sector Deepening Africa (FSDA) to develop strategies to increase listings and the uptake of capital markets products in the region. During the 42nd Meeting of the Africa Middle East Regional Committee (AMERC) of the International Organisation of Securities Commissions (IOSCO) the members agreed that promoting additional listings was key to tackling market liquidity challenges faced in multiple markets as well as reinforcing the central role of securities markets to support sustainable economic growth through increased market-based financing.
Some of the key recommendations arising from the work of the AMERC Working Group on Listings to be further developed upon include: creating more awareness among prospective companies on the opportunities available in the capital markets; improving the efficiency of regulator approval processes to minimize time to market for issuers; reviewing minimum float requirements and minimum shareholder requirements; training of market intermediaries to build their capacity to motivate & handle transactions; and considering more incentives for prospective issuers such as subsidising listing costs and negotiating preferential tax treatment for listed companies.
To move the discussion forward, AMERC, will draw on support from FSD Africa to identify and unlock the potential for additional listings; promote and deepen market-based financing through the a spectrum of capital markets products; and catalyse business growth and expansion plans in the AMERC region. Noting the diverse levels of development of markets in the region, the work will leverage lessons from jurisdictions that have increased listings through policy interventions and innovative and facilitative regulatory frameworks.
In response to the growing demand for responsible or sustainable investments globally, Members further deliberated the need to work towards greater convergence on standards for sustainable finance to address quality and consistency of disclosure, costs of issuance and attractiveness to investors.
Regional members acknowledged that the demand for sustainable assets also provided a platform to use sustainable issuances to fast track wider market structure and efficiency reforms that can strengthen the overall market value chain for all asset classes.
In order to feed into IOSCO’s overall priorities and risk outlook, the meeting mapped key risks that could impede growth of securities markets in the region including: regulatory responses to trading in crypto assets; cyber security and resilience; unfavourable macro-economic environment; and systemic issues around securities market trading and settlement infrastructure. They also identified opportunities to grow markets including; promoting fintech-related innovations such as harnessing distributed ledger technology, artificial intelligence/machine learning, introduction of new products such as derivatives; and deepening financial literacy and education
The International Organization of Securities Commissions (IOSCO) is the international body that brings together the world's securities regulators and is recognized as the global standard setter for the securities sector. IOSCO develops, implements and promotes adherence to internationally recognized standards for securities regulation. It works intensively with the G20 and the Financial Stability Board (FSB) on the global regulatory reform agenda. IOSCO has four regional committees; Africa and Middle East; Asia-Pacific; Europe; and America which meet regularly to discuss cross-cutting issues and agree on joint efforts to deepen and grow securities markets in respective regions.
The African and Middle East Regional Committee is chaired by Mr. Paul Muthaura, Chief Executive of the Capital Markets Authority Kenya and Vice Chaired by Khaled Alhomoud, Commissioner of the Capital Markets Authority Saudi Arabia. It has a total of 28 members with a further 12 observer members covering both national, IFC and regional capital market regulators.