Capital Markets regulators should review the minimum float and shareholder requirements to attract more firms to list on their exchanges.
Members at the 42nd meeting of the Africa Middle East Regional Committee (AMERC) of the International Organisation of Securities Commissions said liquidity challenges facing most markets can be tackled by increasing listings.
Regulators were also urged to minimise approval time for potential issuers, train market intermediaries to better handle transactions and consider introducing more incentives such as subsidising listing costs and negotiating preferential tax treatment for prospective issuers.
Although the Capital Markets Authority has reduced requirements for joining the Nairobi Securities Exchange over the years, there has been a new listing dry spell at the bourse.
The NSE launched the Growth Enterprise Market Segment in January 2013 in order to allow small and medium sized firms to raise capital, while benefiting from increased profile and liquidity within a regulated environment.
GEMS is self-regulated by the NSE and has lower entry requirements compared to the Main Income Market Segment and the Alternative Investment Market Segment.
A company wishing to list is required to have Sh10 million in paid up capital compared with MIMS’s Sh100 million and AIMS’s Sh20 million.