Capital Markets Infrastructure adding value to East Africans
The Capital Markets Infrastructure (CMI) is a technology platform designed to link the Capital Markets of the East African Partner States.
The Financial Sector Development Regionalization Project 1 (FSDRP1) is currently implementing the CMI initiative. The development objective of the Project is the establishment of a solid foundation for the financial sector integration in the EAC region.
The CMI aims at simplifying the process of trading across the borders of the East African Community’s Partner States. Investors have a larger number of instruments including Equities and Bonds from all Partner States within reach. Likewise companies seeking capital are able to reach a wider audience of the regions Capital Markets.
Efficiencies brought about by automation include the use of an Automated Trading System (ATS), a computer program specially designed for trading at an exchange. The CMI provides an ATS for those Capital Markets that did not have one prior to the initiative, such as the Rwanda and Burundi Capital Markets, hence bringing the region up to the same standard.
Likewise it is possible to link the Capital Markets Infrastructure with Capital Markets that already have trading systems like the Uganda and Tanzania Capital Markets. In this case users of the CMI are able to participate in those markets without having to physically be in that country.
Automation provides risk management during trading using Straight-Through Processing (STP). STP enables the trade process for capital market and payment transactions to be conducted electronically without the need for manual intervention. Ease of administration, reporting and surveillance are other benefits the automation provides.
1. Uganda Securities Exchange
UAP Nakawa Business Park,
Block A, Fourth Floor. North Wing.
Telephone: 0312 370815, 0312 370817,0312 370818
2. Dar es Salaam Stock Exchange,
14th Floor, Golden Jubilee Towers,
Ohio Street. P. O. Box 70081,
Dar es Salaam, Tanzania Tel: 255 22 2123983, 2128522
3. Rwanda Stock Exchange limited
Kigali City Tower Building 1st Floor,
Avenue du Commerce P.O Box 3268 Kigali Rwanda
4. National Bank of Rwanda
KN6 Av 4, P.O Box 531
Kigali – Rwanda
5. Bank of the Republic of Burundi
1 Avenue of the Government
BP 705 Bujumbura
6. Infotech Private Ltd
Frequently asked Questions
Q: What is a Capital Market?
It’s a market like any other, but specifically one created for buying and selling of equity debt instruments.
Q: What is an Exchange?
An exchange is the place where debt and equity instruments are traded.
Q: How many Exchanges do we have in East Africa?
Currently there are four exchanges and one being established;
1. Nairobi Securities Exchange 2. Dar es Salaam Stock Exchange 3. Uganda Securities Exchange 4. Rwanda Stock Exchange 5. Burundi Stock Exchange (being established)
Q: Which markets are currently available via the Capital Markets Infrastructure?
1. Dar es Salaam Stock Exchange
2. Rwanda Stock Exchange and;
3. Uganda Securities Exchange are currently linked to the CMI.
There are future plans to link the markets of Kenya (the largest by capitalization in the region) and Burundi once it is established.
Q: What is a Central Securities Depository (CSD)?
A CSD is an institution charged with the safe custody of financial instruments. For the purpose of the CMI, the depository systems hosted at the institution will be referred to as the CSD.
Q: How many Central Securities Depositories do we have in East Africa?
There are eight (8) Central Securities Depositories in the EAC region: Kenya, Uganda and Tanzania have two (2) CSD’s each, while Rwanda has one (1) and Burundi is currently establishing one.
Q: What is the Capital Markets Infrastructure (CMI)?
The Capital Markets Infrastructure (CMI) is a technology platform linking the Capital Markets of the East African Community (EAC).
Q: Why do we need to link the markets of the EAC?
In the run-up to achieving a single currency, the EAC Partner States aim to harmonize monetary and fiscal policies; harmonize financial, payment and settlement systems. Linking the Capital Markets of East Africa is a key milestone towards achieving these objectives.
Q: How does it work?
The CMI connects the Exchanges and Central Securities Depositories of East African countries. It enables participation in the Capital Markets regardless of physical location. To achieve this, the CMI is comprised of three (3) subsystems;
1. The Smart Order Router (SOR)
2. Central Depository Systems Interface (CDSI) and;
3. A secure messaging layer over which communication happens based on FIX and SWIFT.
Q: Where will the Capital Markets Infrastructure be accessible from?
The CMI is accessible online, therefore the location is not important, just a good Internet connection. What is beneficial is that all East African Markets are accessible in a single view.
Q: When will the Capital Markets Infrastructure be available?
The CMI is currently live, access is granted to all licensed participants within the East African Region.