The Law Governing Central Securities Depository, Qualified Financial Contracts and Netting Agreements has been published into the Official Gazette on 3rd June 2025. The new law repeals and replaces Law N° 26/2010 of 28/05/2010 governing the Holding and Circulation of Securities.
The revision of the previous law was driven by the need to align with international best practices, respond to evolving trends in global financial markets, and enhance Rwanda’s competitiveness in the international market in the context of Kigali International Financial Center.
In accordance with international standards, particularly the principles of the International Organization of Securities Commissions (IOSCO), the new law strengthens regulatory oversight by granting the Capital Market Authority the power to license and supervise Central Securities Depository (CSD) operators and authorize CSD participants. The law exempts the National Bank of Rwanda (BNR) as a CSD operator from licensing requirements.
Key innovations introduced by the new law includes the adoption of International Swaps and Derivative Association (ISDA) standard and Global Master Repurchase Agreement (GMRA) which is internationally recognized framework developed by the International Capital Market Association (ICMA). These frameworks govern transactions involving Qualified Financial Contracts, especially repurchase agreements (REPOs), and provide for the enforceability of close-out netting.
The legal recognition of close-out netting under GMRA and ISDA standards enhances the protection of parties in Qualified Financial Contracts in the event of a default, fostering greater trust and confidence among both domestic and international institutions that want to do transactions in Rwanda’s Financial Market. Additionally, the law provides for CSD operators to serve as registries for financial collateral arrangements, which were not provided for in the previous law. Furthermore, the law provides for the establishment of a CSD council to promote stakeholders’ engagement in the governance and development of CSD.
Mr. Thapelo Tsheole, the CEO of Capital Market Authority noted that this reform marks a significant step in strengthening Rwanda’s financial market and aligning with global standards, a move expected to accelerate growth in the fast-developing Kigali International Financial Centre.