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Regulatory approval delays automated stock exchange

Stock brokers monitor a trading session at Uganda Securities Exchange (USE). A new securities exchange ALTX Uganda, which is yet to be launched, will be USE’s competitor. FILE POTO

Kampala- This month would have been the start of the first trading session for Uganda’s first automated stock exchange; however, securing approval from the regulator is taking more time.

ALTX Uganda, which acquired a licence in March 2014, had anticipated that by the end of March 2015, the Capital Markets Authority (CMA), would have issued the approvals for their rules and products.

At the unveiling of the board of directors for ALTX Clearing, Mr Joseph Kitamirike, one of the co-founders of the company, noted that they had moved the launch date forward.

“The regulator had given us March 2015 as the time for the approval. They have now given us June 2015 to have approved the rules and procedures required for us to launch,” he told reporters yesterday.
He also anticipated that by the end of the June 2015, they will be able to launch.

ALTX Exchange, if launched, will be Uganda’s first automated stock exchange. The Uganda Securities Exchange (USE) has been the only stock exchange in the country which still uses white board markers as most trades are still manual.

Mr Kitamirike insisted that the delay in approval of some of their rules was no cause for alarm.
“We have to let the regulators do their work at the moment,” he adds.

Mr Charles Nsamba, the communications and public relations manager at the CMA, told Daily Monitor that they had approved the trading rules sent by ALTX Uganda. He says the only rules yet to be approved are those that guide the settlement of transactions.

“The ALTX Uganda trading rules were approved a while back, but what is pending are the Securities Central Depository (SCD) rules.

Technically, that does not stop them from doing an IPO (Initial Public Offering) now if they had plans or were looking at any. However, we hope to have the SCD cleared by the end of this financial year, which is end of June,” Mr Nsamba said.

The settlement is supposed to be managed by a separate company called ALTX Clearing. The board to ensure corporate governance has only been set up by the company.

The members include Mr Elias Kasozi, a former IMF Uganda adviser and director at Bank of Uganda, Ms Sarah Walusimbi, who also sits on the board of National Social Security Fund and Housing Finance Bank and Dr Peter Takirambudde, a former law professor and board member of the Botswana Stock Exchange.

“We are coming up with a state of the art system. Uganda has delayed in certain aspects of financial service transactions. We have to lead the way in financial markets infrastructure,” says Mr Kasozi, the chairman ALTX Clearing.

Companies show interest
Mr Kitamirike also told reporters that there had been interest from a financial services company and an agribusiness.

“In the meantime, we can confirm that two companies have expressed interest to list with ALTX Uganda,” he added.

He, however, could not reveal the identities of these companies as they are still going through the application process.

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