Kenya is considering legal and regulatory reforms that will enable the issuing of COVID-19 bonds, the capital markets regulator said on Tuesday.
Wyckliffe Shamiah, acting CEO of Capital Markets Authority (CMA) told a virtual meeting that already many governments, institutions and corporations worldwide have raised funds from investors by selling COVID-19 response bonds.
“As a regulator of the capital markets, we think it is a good idea if investors can tap into the market to raise funds to mitigate COVID-19 so long as their purpose is clear,” Shamiah said.
He said that for the bonds to be listed locally, the existing legal framework might need to be customized to enable the issuance of the debt instruments.
Shamiah added that in the countries where the bonds have been successfully subscribed by investors, they have received government support.
He noted that they have already approached relevant government departments in order to consider making the legal reforms.
According to CMA, issuers of the COVID-19 response bonds will only be permitted within specific guidelines in order to protect investors.
The capital market regulator observed that the successful issuance of the bonds by other countries and international financial institutions indicates that there is investors’ appetite for the securities.
Shamiah said that all the financial sector regulators in Kenya are working together in order to mitigate the COVID-19 related impacts.