(3 Minutes Read)
The Rwandan government is set to reform its securities legislation through a new bill aimed at liberalising and expanding Central Securities Depository (CSD) operations. The bill, recently passed by the lower house of Parliament, will allow private and foreign entities, beyond the National Bank of Rwanda (NBR), to operate Central Securities Depositories (CSDs), pending approval by the Capital Market Authority (CMA).
Key provisions of the bill include:
- Expanding the definition of securities to cover a wide range of financial instruments, including company shares, bonds, treasury bills, mortgage-backed securities, and REPO agreements.
- Transferring regulatory oversight of CSDs from the central bank to CMA to avoid conflicts of interest between regulation and operation.
- Enabling CSDs to handle REPO transactions with protections in case of party insolvency.
- Introducing internationally aligned practices, particularly those from the International Organisation of Securities Commissions (IOSCO).
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While some lawmakers raised concerns about potential risks in opening CSD operations to private entities, proponents argued that robust licensing conditions and oversight by CMA will safeguard investor interests. The reform aligns with Rwanda’s broader strategy to attract international capital, strengthen financial infrastructure, and reduce reliance on foreign aid.
Currently, securities under CSD management account for USD 3.3 billion—roughly 26% of Rwanda’s GDP—with 90% held by domestic investors.