CMA to review ETF and Depository Receipts Guidelines as well as Licensing Regulations

Kampala,Uganda… As part of the implementation of the10-year Capital Markets Development Master Plan that was launched in 2016, the Capital Markets Authority (CMA) has embarked on the process of reviewing its laws to ensure that they conform to the new provisions of the CMA Amendment Act 2016.The Act, which was amended for the second time in 2016, introduced among other things, new license categories and as a result, the Authority will be reviewing its Licensing and Approval Regulations, which were last amended in 2003.

Additionally, the CMA has also drafted the CMA(Domestic Exchange Traded Funds) Guidelines as well as CMA (Depository Receipt)Guidelines which will aim to provide more clarity on the process of offering these two products in the Ugandan market. ETFs are open-ended passive investment products that track the performance of an index, a commodity or a basket of assets like an index fund, but trades like a stock on an Exchange,much like shares. Most ETFs are passively managed index funds which normally track an index, with their main objective being to participate in the economic growth of an industry, sector or commodity. On the other hand, a Depository Receipt is a negotiable certificate that represents ownership of shares in a company or listed in another country.

 “The amendments to the regulations and the new guidelines that have been drafted aim to operationalise the CMA Act as amended in 2016, to ensure that we have laws that are relevant to the current needs of the market and easily applicable”,said Keith Kalyegira, the CEO of CMA.

The Master Plan highlights that there is an urgent need to revise and amend the capital markets legal and regulatory framework in order to ease issuance of securities, eliminate duplicative procedures and allow for innovation and product development. To achieve this, the Plan recommends that there is need to review legislation on licensing and supervision of market participants in order to achieve greater efficiency and cost effectiveness. Under this recommendation, two actions will be undertaken. First,the implementation of a risk based supervisory framework which will maximise effectiveness of deployment of the CMA resources in alignment with the East African Community(EAC) policy on regulation of capital markets. Secondly, identifying and harmonizing areas of duplication in regulation by the different regulators in the financial sector in Uganda. 

“Currently, some of our laws, such as the Licensing and Approvals Regulations provide for licensing or approval of certain intermediaries who are also licensed by other regulators in the industry”, Mr. Kalyegira said.

“Our desire is to eliminate any duplicative regulation by increasing collaboration among financial sector regulators so that if for instance, the pensions regulator has issued a license for fund management, then the capital markets regulator should be in position to recognise it within its regulatory framework, and vice versa”.

Mr. Kalyegira added that since we are also moving towards integration of the EAC, we should also aim to harmonize our licensing and approvals criteria across borders, to the extent that an approval in one country is acknowledged in all the other EAC member jurisdictions. 

The draft regulations and guidelines were approved for stakeholder consultations by the Board of the CMA. A stakeholder consultative meeting was held with various representatives of brokerage firms,exchanges, the central bank, and fund managers. Once all the comments from stakeholders have been received and incorporated, the draft laws will be resubmitted to the CMA Board for final approval before they can be gazetted.



CMA was established in 1996 by the CMA Act Cap 84. The Authority has several functions under this Act which include approval of prospectuses or offer documents; development of the capital markets; protection of investors, management of the investor compensation fund,among others. The Act was amended in 2011 to provide for issuance of securities to the public and ensure that CMA becomes a signatory to Appendix A of the International Organization of Securities Commission’s Multilateral Memorandum of Understanding. In May 2016, the H. E the President of the Republic of Uganda assented to the CMA Amendment Act 2016, and it took effect on 20 May 2016. This amendment aimed to improve governance and operational aspects of the Authority and of those regulated under this Act.

Section 101 of the CMA Act gives the Authority powers to develop Regulations which give effect to the Act.

Granting licenses and approvals is one of the duties of the Authority as prescribed under Section 5 (2) (c & d). The Licensing and Approvals Regulations provide for what is required for entry into the market, what is required to remain compliant while conducting business in the capital markets, as well as the fines and penalties in case a player contravenes any of the provisions of the Act or its Regulations.

CMA may also develop guidelines which aim to provide further clarity to industry players on issues such as product issuances, market conduct and operations or any other related matters. The Authority has developed new guidelines for two products, namely, Exchange Traded Funds (ETFs) and Depository Receipts. The drafts can be accessed on the CMA website, and comments sent through email to or

Leave a Reply

Your email address will not be published. Required fields are marked *

Protecting Your Investments




Sign up for our latest news & articles. We won’t give you spam mails.

Copyright © 2021 Capital Markets Authority. All Rights Reserved