The regional forum, the East African Securities Regulatory Authorities (EASRA), is seeking to create a harmonized licensing framework for the region for brokers and dealers, and has also approved draft regulations on book-building for adoption by its members. The draft book-building regulations are to be shared with stakeholders in the member States and their views will be brought to the next EASRA meeting.
Book-building is a process of determining the price at which an initial public offering will be offered. The book is filled with the prices that investors indicate they are willing to pay per share, and when the book is closed, the issue price is determined by an underwriter by analyzing these values.
According to news reports, Joseph Katto, chairman EASRA and CEO of Capital Markets Authority – Uganda, said that book-building can be an effective mechanism for price discovery and demand assessment if regulations are clear and enshrine transparency, The draft regulations would ensure a level playing field for various investor categories.
EASRA also approved a proposal to establish a harmonized licensing requirement framework for stock-brokers and dealers. The proposed framework will guide the drafting of harmonized regulations for licensing within the region.
The decisions were taken during the 37th Consultative meeting held in Kampala, Uganda on 5 April.
EASRA members are also seeking ways to facilitate joint inspection programmes and investigations where two or more member states agree. This would boost cross-border surveillance for market participants who operate across the region..
The meeting was chaired by Katto and was attended by Mrs Nasama Massinda (CEO, Capital Markets and Securities Authority Tanzania), Paul Muthaura (CMA-Kenya), Robert Mathu (CEO CMA-Rwanda), Joseph Bahizi (Representative of Central Bank of Burundi), members of the EASRA technical committees and other Committee members.
EASRA was set up in terms of a memorandum of understanding between the CMAs of Kenya and Uganda, and CMSA Tanzania. They adopted a common blue print on the integration of the East African Capital Markets in 1997. CMA Rwanda later joined and Central Bank of Burundi in 2011.