Financial Crime World

Authority Takes Center Stage in Uganda’s Financial Sector

The Authority has emerged as a key player in Uganda’s financial sector, with its presence felt across various aspects of the industry.

Regulatory Framework

In an effort to ensure a stable and efficient financial system, the Authority has put in place a number of regulations and guidelines that govern the operations of:

  • Tier 4 Microfinance Institutions
  • Money Lenders
  • Non-Deposit Taking Microfinance Institutions
  • Savings and Credit Cooperative Societies (SACCOS)

Regulations

  • The Tier 4 Microfinance and Money Lenders (Non-Deposit Taking Microfinance Institutions) Regulations, 2018 provide for the requirements for licensing a non-deposit taking microfinance institution.
  • The Tier 4 Microfinance and Money Lenders (SACCOS) Regulations, 2020 govern the operations of SACCOS, providing for the requirements for licensing, governance structure, prohibited activities, minimum equity requirements, liquidity and asset management, and member shares.

Islamic Microfinance

The Authority has also established a framework for Islamic microfinance, which allows Tier 4 microfinance institutions to offer this service in addition to their conventional financial services. Before offering Islamic microfinance, an institution must apply to the Authority for approval and provide proof that its proposed dealings and transactions will comply with Shari’ah principles.

Capital Markets Authority Regulates Uganda’s Capital Markets

The Capital Markets Authority of Uganda (CMA) has emerged as a key regulator in Uganda’s capital markets, with its presence felt across various aspects of the industry.

Responsibilities

  • The CMA is responsible for promoting and facilitating the development of an orderly, fair, and efficient capital markets industry in Uganda.
  • To achieve this, the CMA approves the securities exchange, licenses market players such as broker/dealers, investment advisors, and collective investment scheme managers, and approves all offers of securities to the public.

Regulated Entities

The CMA regulates various entities in the capital markets industry, including:

  • The Uganda Securities Exchange (USE)
  • Licensed intermediaries
  • Investment and transaction advisors
  • Venture capital funds
  • Fund managers
  • Collective investment schemes
  • Market advisors
  • Other persons listed under Section 30 of the Capital Markets Authority Act.

Licensing Requirements

For an entity or individual to act in any of these capacities, they must have procured approval from the CMA and a license to operate from the CMA. The requirements for obtaining a license include furnishing a detailed statement of assets and liabilities signed by the applicant, as well as providing copies certified by a director of the company to be true copies of the last balance sheet and profit and loss account.

The Future of Financial Services in Uganda

As Uganda’s financial sector continues to evolve, the Authority is likely to play an increasingly important role in shaping its future. With its presence felt across various aspects of the industry, it is clear that the Authority will be a key player in ensuring a stable and efficient financial system.

Future Developments

In the coming years, the Authority is likely to continue to regulate and guide the operations of Tier 4 microfinance institutions, SACCOS, money lenders, and other entities in the financial sector. It is also possible that the Authority may introduce new regulations or guidelines to address emerging issues or challenges in the industry.

Conclusion

As Uganda’s financial sector continues to evolve, it will be interesting to see how the Authority adapts to these changes and shapes its future. One thing is clear, however - the Authority will continue to play a vital role in ensuring that Uganda’s financial system is stable, efficient, and fair for all stakeholders.