The AELP is an integration initiative launched by the African Securities Exchanges Association (ASEA) in partnership with the African Development Bank (AfDB) and other stakeholders, to facilitate cross-border trading and investment within African capital markets. The AELP consists of 2 Phases:
Phase 1 – Link up the 7 pilot exchanges; drive capacity building; establish a Project Management Office; develop (and launch) the Order Routing Management System “AELP Link” (hosted by DirectFN); connect 35 brokers to AELP Link trading platform (5 brokers per exchange). 31 brokers have successfully connected to the AELP Link. Botswana Stock Exchange and Ghana Stock Exchange to link up by September 2023.
Phase 2 – Implement a robust sustainability plan, which includes linking an addition 8 exchanges and 40 of their brokers.
Currently, the AELP focuses on African equity markets.
AELP participating exchanges:
- Bourse Régionale des Valeurs Mobilières (BRVM, integrating 8 West African markets)
- Casablanca Stock Exchange
- The Egyptian Exchange
- Nairobi Securities Exchange
- Nigerian Exchange
- Stock Exchange of Mauritius
In April 2020, the procurement for an order-routing technology platform called the AELP Link was established. The AELP Link will enable a stockbroker on one exchange (originating exchange) to channel a client’s buy or sell order to a stockbroker on a second exchange where a target security is listed (host exchange). The system is designed to handle orders on all participating exchanges.
Trade execution will continue to be handled according to the host exchange's law, regulation and practice, with the executing broker responsible for compliance.
Clearing and settlement will also follow the host market practice. The banks will transfer funds to settle the transactions separately from the order-routing system for stockbrokers, clients’ custodians, or sub-custodians. Securities purchased through the AELP Link, when the JSE is the host exchange, will be held by Strate.
Implementing the AELP Link does not require changing existing JSE rules and directives.
Supporting the free movement of investment in Africa
Other AELP initiatives aims to include making it easier for investors to access research into other AELP markets and increasing knowledge of the African listed securities asset class, including companies, bonds, ETFs and other securities listed on the participating Exchanges. Currently the AELP focuses on the Equities market.
- On 30 June 2023, ASEA signed an agreement with the African Development Bank of $600,000 grant to expand the AELP network to 15 African exchanges.
- On 25th March 2023, the AELP Project Manager and ASEA President initiated discussions with PAPSS (Pan-African Payment and Settlement System) to explore potential collaboration to streamline the payments and settlement process for the AELP. An AELP-PAPSS Implementation sub-committee, comprising members from the respective AELP working committees and representatives from the Central Depositories, has since been established.