Uganda: Support for the Implementation of Collective Investment Schemes
The purpose of this project was to analyse the draft of the Collective Investment Schemes (CIS) Act (2003) and various specific regulations under the Act, which were: regulation of investment companies with variable capital; finance and accounting; licensing; unit trust and conduct of business. Pension funds were separately regulated and not brought under the CIS Act and regulations subsidiary thereto.
In addition, the consultants compared the CIS regime in Uganda with that of its fellow members of the East African Community (EAC) (Kenya and Tanzania) in order to determine the level of harmonization between the three countries. Harmonization of regulation in the EAC was an important objective because it facilitated cross-border investments in the CIS sector to the benefit and long-term growth of the region’s capital markets. Much of the regulation in Uganda and also in Tanzania and Kenya were modelled on the regulations of the FSA in the U.K. The consultants concluded that CIS regulation in Uganda met the standards of the International Organisation of Securities Commissions (IOSCO). They also concluded that regulation in the EAC was broadly harmonized.
The recommendations made for improvements to the CIS Act and the above referred regulations assisted Uganda to strengthen the regulation and supervision of the CIS sector and served as a basis for similar upgrading of law and regulations elsewhere in the East African Community, which in turn helped promote cross-border investment in CIS.
The documents disseminated in this site should benefit other countries at a similar stage of development in the CIS sector with respect to the five proposed regulations. In particular there should be a benefit to some countries in Sub-Saharan Africa especially those of the East African Community, but also those countries that have based their financial sector legislation and regulation to some degree on that of the U.K.
Some of the draft regulations are long and the consultants’ comments are tracked in red throughout.