The Capital Markets Authority (CMA) Uganda has been admitted by global securities standards setter, the International Organization of Securities Commissions (IOSCO) as a signatory to Appendix A of the IOSCO Multilateral Memorandum of Understanding (MMoU). This follows the recent amendment of the CMA Act, which subsequently provided grounds for the re-submission of an application to be admitted to this prestigious level of membership in the global body.
The MMoU provides an international benchmark for cross-border co-operation and offers securities regulators with the tools for combating cross-border fraud and misconduct that can weaken global markets and undermine investor confidence.
CMA Uganda becomes the 112th member to append it's signature to the memorandum which was instituted in 2002. Admission to this cluster also means that Uganda's regulator will have increased access to knowledge and research through the IOSCO network which will boost our investor education and market development activities.
"This is a big step for CMA and Uganda in general and I must thank all the stakeholders that have been very instrumental in enabling us to reach this milestone including the CMA Board; our parent ministry of Finance, Planning and Economic Development; Parliament of Uganda; and the Ministry of Justice and Constitutional Affairs which has tirelessly worked with us to enhance our regulatory framework so that it can fit international standards", said Keith Kalyegira, the CEO of CMA.
The MMoU was curved out of the need for mutual cooperation, assistance and consultation among members to ensure compliance with, and enforcement of securities laws and regulations, as a result of the increase in international activity in the securities and derivatives markets.
Mr. Kalyegira said that CMA Uganda became a member of the IOSCO Appendix B in 2007 and has since been compliant with most of the international best practices in regulation. However, as an Appendix B member, CMA's participation, engagement and contribution to international dialogues was limited.
"Our desire going forward is to transform Uganda's capital market into one of the most efficient, and trusted centres for attracting capital and providing capital in Africa, and this could not easily be achieved without enhancing our regulatory framework to fully suit international standards by ensuring we comply with Appendix A requirements", he added.
One of the key things investors look out for is the safety of their investments and this can only be assured by the standard of regulation in a given country. So the nod from IOSCO is an endorsement to Uganda's capital market. The approval also gives Uganda's capital market international visibility and increases trust and confidence in our regulatory system. The formal signing ceremony will be held at the 42nd IOSCO annual conference which will be held in Jamaica in May, 2017.
CMA recently concluded its five (5) year strategy, and expects to launch a ten (10) year capital markets development masterplan by the end of March, a document which will map out the sector's growth plan and also lay out the strategy for increasing access to patient capital to finance the growth of commerce and industry in Uganda.
NOTES TO THE EDITOR
The Uganda Capital Market Authority (CMA) submitted its reapplication to the IOSCO General Secretariat to become a signatory to the IOSCO MMoU on 14th July, 2016. CMA first applied to IOSCO to become a signatory to the IOSCO MMoU in September 2007, and was assigned to Appendix B. IOSCO reverted to CMA which, proactively, began a series of steps over several years towards legislative change to bring Uganda's legislation into compliance with the MMoU.
CMA was established in 1996, following the enactment of the Capital Markets Authority Act (CMA Act). The Authority is an autonomous body responsible for promoting, developing and regulating the capital markets industry in Uganda, with the overall objectives of investor protection and market efficiency. It is mandated to approve, license and oversee stock exchanges as well as license brokers/dealers, investment advisors, fund managers, collective investment schemes and the securities central depository. CMA is a member of the East African Securities Regulatory Authorities, which has been instrumental in the development of the capital markets industry in East Africa. CMA cooperates with other government agencies in the financial sector including Bank of Uganda, the Insurance Regulatory Authority, the Uganda Retirement Benefits Regulatory Authority, and the Uganda Registration Services Bureau. The Uganda Registration Services Bureau acts as the Registrar of Companies and implements the Companies Act, 2012 (Companies Act).
CMA also cooperates with law enforcement agencies such as the Office of the Attorney General, Director of Public Prosecutions and the Uganda Police. To strengthen cooperation, CMA, Bank of Uganda and the Uganda Insurance Commission (now the Insurance Regulatory Authority) signed a Memorandum of Understanding designed to facilitate cooperation and exchange of information in the securities, banking and insurance sectors.
Trading of listed securities is conducted through the Uganda Securities Exchange (USE) which was established in 1998. There are currently sixteen companies listed on the USE, seven of which derive from the privatisation of government parastatals. Trading of government bonds on the USE was introduced in 2004. As of July 2015, an automated trading system was introduced on the USE and the clearing and settlement period is three days. A computerised Securities Central Depository System (SCD) was put in place in 2010 following the enactment of the Securities Central Depositories Act (SCD Act) in 2009. The SCD has enabled the USE to automate the clearing and settlement process. On March 4, 2014, CMA's Board of Directors considered and approved the application of ALT Xchange East Africa Limited to operate as a stock exchange in Uganda in accordance with the CMA Act.
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