Capital Markets are an important part of Southern African Development Community (SADC) plans for establishment of regional financial systems. Long-term Infrastructure projects and Social Development programmes often require substantial funding, raised by capital markets through stocks, bonds, and other Investments offerings. These projects and programmes are necessary in achieving SADC goals of a modern, integrated economy, and in enticing Private Sector Investment into the region. For this reason, SADC has specified support for the development of capital markets in its Protocol on Finance and Investment.
Capital Markets and the Protocol on Finance and Investment
SADC established the Protocol on Finance and Investment in 2006 to help further the goal of economic integration throughout Southern Africa. In part, the Protocol on Finance and Investment requires Member States to facilitate the creation and expansion of capital markets and to cooperate on maintaining and regulating their existing stock exchanges. The long-term aim of these activities for SADC is to establish harmonised securities markets throughout the SADC region that can attract Investment and allow the regional economy to compete on a global scale.
Specifically, it is intended that Member States should engage in the following:
- Regular Liaison with other Member States on matters of Investment;
- Co-operative development of training mechanisms for market professionals;
- Harmonisation of listing requirements for national stock exchanges; and
- Shared research and information management on market surveillance, regulation, and investor encouragement.
The Committee of SADC Stock Exchanges
To facilitate better operations and collaboration on capital markets, SADC established the Committee of SADC Stock Exchanges (CoSSE) in 1997. Resourced by the SADC Secretariat, and supported by the Johannesburg Stock Exchange Limited, this Committee has the following objectives:
- To improve the operational, regulatory and technical requirement underpinnings and capabilities of SADC exchanges;
- To make the securities markets of SADC exchanges more attractive to both regional and international investors;
- To increase market liquidity and enhance trading in various securities and financial instruments;
- To promote the development of efficient, fair and transparent securities markets within the SADC region;
- To encourage the transfer of securities markets’ intellectual capital and technical expertise among the member countries of the Committee;
- To encourage interaction among market participants;
- To encourage the development of a harmonised securities market environment within the SADC region; and
- To maximise co-operation among Committee members.
Currently, the Committee of SADC Stock Exchanges oversees securities exchanges in Botswana, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. It also works closely with the Committee of Insurance, Securities and Non-Banking Financial Authorities (CISNA), which forms part of SADC’s Trade, Industry, Finance and Investment Directorate.
In 2012, the Committee of SADC Stock Exchanges launched a new website to improve visibility and access to data about Southern African stock exchanges. This is part of the Committee’s focus on using technology to improve linkages between capital markets in the region. Along with this website, the Committee has also developed three sub-committees to further its priorities:
- The Legal and Secretariat Working Committee – which is responsible for formalising and resourcing the Secretariat, and for continuing and improving liaison with the Committee of Infrastructure, Securities, and Non-Banking Financial Authority and other SADC organs.
- The Market Development Working Committee – which is responsible for helping member exchanges to ensure their clearing and settlement systems comply with new global standards and support regional initiatives; and
- The Capacity-Building and Visibility Working Committee - which is responsible for liaising with member exchanges, regulators, stockbrokers, investors, and others to develop and coordinate training courses. It helps members to upgrade their own websites, and ensure their trading data and company news are disseminated internationally.
Committee of Infrastructure, Securities, and Non-Banking Financial Authority
Since its inception in 1998, the Committee of Insurance, Securities and Non-Banking Financial Authority has worked to implement a harmonised, risk-based regulatory framework that encourages investment in capital markets while mitigating risk and protecting consumers. It strives to achieve this objective through cooperation and information sharing, concentrated on the following:
- Harmonising legislation to ensure consistency and adherence to international regulatory standards and best practices;
- Fostering liaison and cooperation with regulatory bodies to develop regional capability and to counter money laundering and the financing of terrorism;
- Facilitating the development of capable, professional regulatory employees;
- Facilitating the development of well-informed investors and consumers; and
- Promoting adherence to sound corporate governance practices based upon international best practices