Through discussions with practitioners from South African banks, a number of challenges were identified linked to the growth of vibrant financial markets within individuals countries in the African continent, which in turn frustrate the development of a vibrant financial market across the region. One of the key challenges we identified was the lack of common legal documentation to underpin standard economic transactions.
Inconsistent implementation of legal frameworks and conflicting interpretations of relevant legislation and documentation poses a threat to the safety net provided for parties participating in transactions.
In solving for this, we have identified the International Swaps and Derivatives Association (ISDA) and the International Capital Markets Association (ICMA) as two leading global trade organisations that have provided important documentation used in swaps and derivative transactions and bond repurchase transactions, respectively.
The African continent is often challenged with financial markets that do not reach their full potential. While the documents prescribed by the ISDA and the ICMA are utilized by many multinational banks and corporations within SADC, majority of the countries within SADC do not have local laws and regulations which support and provide legal certainty in respect of the enforceability of key provisions in those documents.
The Regional Indicative Strategic Development Plan provides an opportunity to begin framing a discussion around what may be required to promote a more efficient financial market for the region.
The Centre of Excellence in Financial Services has completed the project identifying possible ways to harmonise the interpretation and implementation of market and transaction documentation across the SADC region.