Financial Crime World

Uganda Strengthens Anti-Money Laundering & Terrorism Financing Measures

Enhancing Financial Stability and Combating Illicit Activities

Kampala, Uganda - The Ugandan government has introduced new anti-money laundering (AML) and counter-terrorism financing (CFT) requirements for microfinance institutions and capital markets players to enhance financial stability and combat illicit activities.

New Requirements for Microfinance Institutions

The Tier IV Microfinance Institutions and Money Lenders Act 2016 now requires all tier 4 microfinance institutions offering Islamic microfinance services to apply for approval from the Uganda Microfinance Regulatory Authority (UMRA). To secure approval, applicants must provide:

  • Proof that their dealings and transactions will comply with Shari’ah principles
  • Appointment of a Shari’ah advisor
  • Outline of proposed financial products and structures
  • Establishment of a Shari’ah compliance mechanism
  • Demonstration of how they will segregate Islamic microfinance business from conventional operations

New Licensing Requirements for Capital Markets Players

The Capital Markets Authority (CMA) of Uganda has outlined new licensing requirements for entities seeking to operate in the country’s capital markets. To obtain a license, applicants must provide:

  • Detailed statements of their assets and liabilities
  • Certified copies of their balance sheets and profit-and-loss accounts
  • Proof of financial resources
  • Payment of requisite fees
  • Any other information required by the authority

Regulation of Capital Markets

The CMA regulates all aspects of Uganda’s capital markets, including:

  • The Uganda Securities Exchange (USE)
  • Licensed intermediaries such as brokers and dealers
  • Investment advisors
  • Venture capital funds
  • Fund managers
  • Collective investment schemes
  • Market advisors

The CMA has approved:

  • 2 stock exchanges
  • 2 securities central depositories
  • 8 brokers
  • 2 dealers
  • 7 fund managers
  • 5 collective investment scheme managers
  • 2 trustees
  • 7 investment advisors
  • 17 listed companies

Regulatory Framework

The regulatory landscape for capital markets in Uganda is governed by several laws and regulations, including:

  • The Capital Markets Authority Act, Cap 84
  • The Capital Markets Authority (Amendment) Act, 2011
  • The Collective Investment Schemes Act, 2003
  • The Securities Central Depository Act, 2009

Commitment to International Standards

“The introduction of these new requirements is a significant step forward in our efforts to combat money laundering and terrorism financing,” said a spokesperson for the CMA. “We are committed to ensuring that all financial institutions operating in Uganda comply with international standards and best practices.”

For more information on the regulatory requirements for microfinance institutions and capital markets players in Uganda, please visit the CMA website at https://cmauganda.co.ug/.