Kenyan authorities are putting the final touches on legislation which would allow the introduction of securities lending and borrowing in the East African country.

The Capital Markets Authority (CMA), which regulates Kenya's stock exchange, central depository and settlement system, sent out a note this week asking for feedback on the proposed rules.

CMA chief Paul Mauthaura said the organisation, with the support of the World Bank, is in the "final stages" of developing securities lending and borrowing regulations.

“In order to ensure that the proposed legal framework meets the needs of the market, the CMA has held several consultative meetings with key stakeholders to inform the development of the draft regulations," Mauthaura added.

Henry Rotich, assistant director at Central Bank of Kenya, has been overseeing the development if the lending and borrowing requirements.

Comments from market participants on the proposed set of rules are being accepted up until the end of November.

CMA added that the introduction of securities lending in Kenya is intended to increase overall market liquidity and flexibility of financing.

It is also seen as an effective way to boost capital market efficiency through price discovery.

The Nairobi Securities Exchange, already one of Africa’s most high profile equities markets, has over 60 listed companies in 10 different industry sectors.

It also has plans to launch financial derivatives and ETFs in the medium term.