Regulators have eased the conditions that issuers looking to list securities on the four East Africa bourses will have to meet in measures meant to make the region a single investment hub.

Under the proposed rules now waiting to be endorsed by politicians, issuers will only present one information memorandum to the national regulator and pay between Sh1.7 million and Sh17 million depending on the size of the offer.

Nairobi Securities Exchange (NSE) head of market and product development Donald Ouma said the rules still have to go before the Council of Ministers responsible for EAC matters in the region before they are approved and taken to the East African Legislative Assembly for enactment into law.

“After the EASRA (East African Securities Regulatory Authorities), what will be done is that the directives will go to the Council of Ministers who will take the process forward for the individual countries to implement,” he said.

Presently, issuers have to give an information memorandum to each country’s regulator when they seek cross-listing. There have been no regulations for multiple listing on the bourses at a go. The fees were also set by national regulators but will now be prescribed by the East Africa Stock Exchanges Association.

The single information memorandum will be required to comply with the laws in each market. Initial public offers of securities will also use a single set of disclosure standards.

The East African Stock Exchanges Association has been driving change in the exchanges’ rules in order to ease cross-border trading by investors.

In the Council Directive on Public Offers of Securities-Equities the Common Market Protocol provides that the East African Community (EAC) states would undertake to approximate their national laws, policies and systems to help deepen integration.

The harmonisation of the standards of public offers of securities is being done to protect investors by ensuring fair, efficient and transparent markets as well as reducing systemic risks.

In the directive, private offer of securities will be allowed if they are to no more than 100 invited persons who are professional or experienced investors as is the case in Kenya.

For the private offers to be a subject of the capital market regulator under the proposed directive, the minimum subscription for securities per applicant shall not be less than $10,000 or Sh860,000 in Kenya’s case.

The directive said that the private offers can be to members of a club or association, who can be reasonably regarded as having a common interest with one another or the club.

“The securities are offered to a restricted circle of persons whom the offeror reasonably believes to be sufficiently knowledgeable to understand the risks involved in accepting the offer,” said the directive.

A company can file an offer document for securities with capital markets regulator for up to three years before the actual public offer.

Whenever a firm or organisation seeks to raise funds or list on a securities exchange, the regulators in the region will be getting a fee totalling 0.1 per cent of the value of the transaction.