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Photo Illustration: IGAD leaders hold a virtual summit to discuss COVID-19 response. Regulators need to digitise their operations and their decision-making protocols to keep regulations responsive to the market during the crisis.
Regulating the financial markets is no easy task, and in Africa it is arguably more difficult than in many other places. Our continent has 54 countries and multiple regulatory regions – some regions such as CEMAC and WAEMU have a common regulator per region, but most other countries have individual regulators. Their task is to ensure that they have their finger on the pulse of the financial markets, and are constantly up to date with market developments. Regulators have a multi-faceted task in the financial markets. They formulate and introduce regulation, and are also responsible for the supervision and oversight of the markets. When necessary, they need to investigate and censure market participants for contravening regulation. In order to carry out their mandate effectively, the regulations that are promulgated need to be enforceable – they have to have teeth. In addition to effectiveness, it is just as important for Regulators to regulate efficiently, and in order to do this they need to be responsive and agile. This is where the global pandemic provides Regulators with opportunities.
As Africans, we place great importance on face to face meetings, and rightly so. These meetings allow us to evaluate each other, take note of body language, eyeball each other while we are in discussions, in order to judge commitment and integrity. Historically, this has been the medium of choice for business engagements. Covid 19 has put paid to that and in the new global environment, if we wish to continue building our economies, we need to do work differently. This means that we must embrace new ways of operating, and this includes taking advantage of the burgeoning means of communicating digitally. Meeting apps such as Zoom, Google Hangouts and Microsoft Teams are being used now more than ever before. Data from Learnbonds.com shows that the download of Zoom meetings between the 22 February and the 22 March 2020 increased by 1,270%. Documents can be signed securely using electronic signature software such as DocuSign. Organisations can apply an electronic seal to their official documents in order to certify their origin and integrity. Voting can be done electronically by using features within Zoom and other videoconference software. Meetings can be recorded and transcripts can be digitally processed in addition to regular meetings minutes being taken.
The world as we know it has ended, but financial markets and their regulation continues. Remote oversight and digital communication are here and are effective and efficient tools to ensure that the important task of regulating appropriately can continue. We look forward to working with Regulators in this new normal, as we just have, with great success, on a regional video conference call with the Regulators from Kenya, Uganda and Rwanda!
Article by Tamsin Freemantle, Regulatory Policy & Supervision Manager, ACfA