Uganda Securities Exchange Toughens Know Your Customer Procedures

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In a bid to enhance financial transparency and prevent money laundering, the Uganda Securities Exchange (USE) has issued new guidelines on Know Your Customer (KYC) procedures for all its members.

Background

The USE’s MEMBERS’ NOTICE No. 1/2018, dated June 5th, 2018, outlines the requirement for strict compliance with Anti-Money Laundering Regulations No. 75 of 2015 and Operating Procedure no. 3 under the USE SCD Operating procedures of 2015.

New Guidelines

The guidelines outline different sets of documents required for various categories of members, including:

• Individuals:
  • Summary of business activities or source of income
  • Disclosure of risk appetite
• Minors:
  • Birth certificates or certified copies of passports
• Companies:
  • Certified incorporation certificates
  • Articles of association
• Clubs, Associations and Committees not set up by Government:
  • Proof of registration with relevant authorities
• Partnerships:
  • Partnership agreement
  • Identity documents for all partners
• Sole Proprietorships:
  • Business registration certificate
  • Identity document
• Estate Accounts:
  • Letters of administration or grant of probate

Compliance and Consequences

The USE has warned that failure to provide the required documents shall be treated as a default of membership obligations, and the exchange reserves the right to reject any accounts that do not comply with the new guidelines.

Objectives

The new KYC procedures are aimed at enhancing financial transparency and preventing money laundering in the country’s securities market. The USE has urged all its members to strictly adhere to these requirements to maintain the integrity of the market.

By implementing these measures, the USE hopes to create a more transparent and secure environment for investors and to prevent illicit activities from undermining the stability of the market.