African stockbrokers to boost cross-border operations

by Taofik Salako, Capital Market Editor

Leading African stockbroking groups have signed an agreement to establish a common group that will help to facilitate seamless securities dealings and transactions across African capital markets.

Securities and stockbroking associations from Nigeria, Egypt, Kenya, Mauritius and Morocco signed the Memorandum of Undertaking (MoU) to establish African Stockbrokers and Securities Dealers Association (ASSDA) in Botswana, southern Africa. The West African Economic and Monetary Union (WAEMU) was also part of the agreement while the President of African Stock Exchanges Association (ASEA), Mr Karim Hajji, was an observer.

The Association of Securities Dealing Houses of Nigeria (ASHON) signed the MoU, which is expected to facilitate cross-border trading, settlement of securities, innovation and diversification.

Chairman, Association of Securities Dealing Houses of Nigeria (ASHON), Chief Patrick Ezeagu said the decision to establish ASSDA was taken at a roundtable organised by the African Development Bank (AfDB)  in Abidjan on April 24, 2019, for the African Exchanges Linkage Project (AELP).

He explained that the AELP was a joint initiative of ASEA and AfDB to enable and facilitate cross-border trading and settlement of securities across participating exchanges in Africa.

The ASSDA is expected to foster Pan-African investment and trading of securities, and actualise the AELP.

According to the founding charter of the ASSDA, membership of ASSDA shall be an association of associations constituted of full members that are registered stockbrokers or securities dealers or associations whose members deal in securities in one form or another as approved by the Governing Council of ASDDA. The AfDB and ASEA shall also serve as observer members of ASSDA.

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Among the objectives of ASSDA is the deepening of financial markets in Africa by encouraging and supporting measures that shall enable and facilitate trading and settlement of securities through stockbrokers and securities dealers across exchanges in Africa.

ASSDA also supports the overarching goal of boosting Pan-African investment flows, promoting innovations that support diversification needs of investors in Africa, and helping address the lack of depth and liquidity in Africa’s financial markets.

ASSDA shall also be the umbrella and advocacy body that shall engage with regulators, exchanges, other Pan African bodies and governments in seeking to find solutions that shall facilitate trading in securities across Africa.

With the signing of the MOU today, ASSDA has formed an initial caretaker committee that shall work towards mobilising other stockbroking and securities trading associations across Africa in anticipation of a General Assembly meeting in 2020.