Financial Crime World

Uganda’s Capital Markets Authority Regulates Growth of Financial Sector

The Capital Markets Authority (CMA) of Uganda has played a crucial role in promoting a fair and efficient financial sector, issuing licenses to various market players and regulating the activities of stock exchanges, brokers, investment advisors, and collective investment scheme managers.

Regulation of Islamic Microfinance Services

Under Part VIII of the Tier IV Microfinance Institutions and Money Lenders Act 2016, CMA regulates institutions offering Islamic microfinance services. To operate such services, a tier 4 microfinance institution must:

  • Apply to the Uganda Microfinance Regulatory Authority (UMRA) for approval
  • Provide proof that the proposed dealings will conform to Shari’ah principles
  • Nominate a Shari’ah advisor
  • Submit details on finance modes and product structures

Regulation of Capital Markets

CMA regulates capital markets, overseeing activities such as securities trading on the Uganda Securities Exchange (USE). Licensed entities include:

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

The authority approves all offers of securities to the public and ensures compliance with relevant laws and regulations.

Obtaining a License from CMA

To obtain a license from CMA, applicants must:

  • Furnish detailed financial statements
  • Provide proof of payment of requisite fees
  • Submit other information required by the authority

The law also provides for penalties for offenses related to trading in securities.

Guidelines and Regulations

In addition to its regulatory role, CMA has issued various guidelines and regulations to govern capital markets activities, including:

  • The Capital Markets Authority Act, Cap 84
  • The Capital Markets Authority (Licensing) Regulations S.I 84-1
  • The Collective Investment Schemes Act, 2003

These laws, regulations, and policies can be accessed on the CMA website.

Future Growth of Uganda’s Financial Sector

The growth of Uganda’s financial sector is expected to continue, driven by the efforts of CMA and other regulatory bodies. As the industry expands, it is essential that stakeholders remain vigilant in ensuring compliance with relevant laws and regulations.