CSD integration among the four East African regional exchanges is set to remove cross-border limitations on the trading of securities.
In recognition of the challenges faced by investors when transacting in markets across the region, the East African Securities Exchange Association (EASEA) considered three proposals for an inter-depository transfer mechanism for cross-listed securities.
This would allow brokers in Uganda, Tanzania, Kenya and Rwanda to conduct seamless trading but will require all cross-listed securities to be immobilised on the primary markets. At the same time, the project faces logistical hurdles as the regional securities exchanges are in various stages of CSD implementation.
"It is anticipated that the commencement of the inter-depository mechanism will be the end of the first quarter of 2012," said EASEA in a statement.
Other initiatives identified as priorities by the Association include a regional broker license, implementation of regional IPOs and the introduction of regional equity and bond indices.
At a meeting in Kigali, Joseph Kitamirike, chairman of EASEA and CEO of the Uganda Securities Exchange, noted that "commendable progress" has been made on the common market integration process and that interconnectedness and collaboration among the regional stock exchanges would increase efficiency and liquidity in the region.
He also emphasised the need for the region to increase its efforts to improve capital markets literacy.
