Minister urges youth to embrace financial literacyKampala, 30th April, 2013…The youth have been urged to identify their strengths and transform them into opportunities that will enable them confront the future if they are to be better citizens.
Under the Statute, the functions of CMA include the following:
CMA is governed by a Board of Directors which formulates policies for the Authority. Committees of the Board have been set up to deal with specific aspects of policy, for instance Legal, Policy and Compliance; Finance and Administration, Research and Market Development and Audit. The day-to-day operations of the Authority are the responsibility of the Chief Executive Officer and his staff.
Section 102 of the Capital Markets Authority Act (Cap. 84) empowers CMA to make regulations prescribing any matter required or permitted by the Statute to be prescribed for carrying out or giving effect to the Statute.
To-date, rules and regulations have been promulgated covering prospectus requirements, establishment of Securities Exchanges, conduct of business, advertisements, maintenance of registers of interests in securities, accounting and financial requirements and licensing of market operators. Guidelines for the issuance of corporate bonds and commercial paper have also been published. In addition, documents covering procedures for companies going public and an investor's guide to shares and public flotation have been issued.
From the start, the CMA adopted a licensing policy designed to ensure that capital markets in Uganda will have the capability to mobilize savings from domestic, regional and international markets. In this regard, CMA's licensing policy concentrates on the following three criteria:
There are serveral firms licensed to carry out broker/dealer and investment advisory services; and serveral other firms or individuals licensed as investment advisors only.
The Uganda Securities Exchange (USE) Limited was approved by CMA in June 1997 as the only approved securities exchange in Uganda. This became the 17th licensed Securities Exchange in Africa. The members of the Exchange are from the private sector. Securities Exchange listing rules, rules and regulations governing members, operations and trading rules have been approved and adopted. The USE has adopted an open outcry system of trading.
Various securities are currently being traded on the Exchange including the local and cross border listings. The listing of East African Breweries Limited on the USE in March, 2001marked the first cross-listing of shares in the East African region. In addition corporate and government bonds have been traded on the exchange.
Future supply of products on the Exchange is expected to come from the privatization of state enterprises, private sector company listings, and issuance of bonds by Government, corporations and local/municipal authorities.
Significant progress has been made in the area of regional co-operation through a forum known as the East African Member States Securities Regulatory Authorities (EASRA), which brings together the securities regulators and securities exchanges in Burundi, Kenya, Rwanda, Tanzania and Uganda. EASRA's objective is to harmonize the securities laws and infrastructure of capital markets in the East African region leading to common training and conduct of business standards, and cross-border listing of companies within the region. The cross listings mentioned above are a result of this initiative.
The CMA recognizes that enhancing public education and awareness about securities is an important part of its mandate. It also believes that public education is one of the most effective regulatory tools. CMA has therefore developed and will continue to develop public education programs whose ultimate goal is to have all Ugandans benefit from participation in the capital market. CMA believes that only through knowledge and awareness can it hope to achieve effective investor protection, can investment professionals provide the best service and can investors understand risk and choose the right investment product.
An Investor Compensation Fund (ICF), for the purpose of granting compensation to investors who suffer pecuniary loss resulting from the failure of a licensed broker or dealer to meet his contractual obligations has been established by the CMA as required by the statute. Annual contributions to the fund are made out of the Authority budget and from market practitioners. The aim of the fund is to enhance investor confidence in the newly created markets. CMA will be exploring other ways of funding the ICF as the market grows.
Capital Markets Authority
14 Parliament Avenue
Jubilee Insurance Centre, 8th Floor
P.O. Box 24565 KAMPALA - Uganda
Tel:(256) 414-342788, 0312 264950/1
Fax: (256) 41-342803