Uganda Securities Exchange to demutualise, eyes listing

Uganda Securities Exchange (USE) has received formal approval from the Capital Markets Authority (CMA) to operate a demutualised entity stock exchange in accordance with the requirements of the Capital Markets Authority (Amendment) Act 2016 and the Capital Markets Authority Regulations 2016, a statement from the bourse indicates. 

The statement indicates that the USE will become a self-regulated organization with a change in its governance and managerial structure. At the moment, brokerage companies jointly own USE and set rules for themselves. 

Under the current status quo, it is difficult for new brokerage companies to be admitted to the USE since their competitors, who run the USE, must all agree to admit any prospective member, Paul Bwiso, the Chief Executive officer of USE, noted in an interview. 

"Demutualisation provides numerous benefits to an exchange, such as ability to raise extra capital through self-listing, making it easier for new members to join and better governance structures," he explained. 

According to the 2014/15 national budget speech, there are 40,000 registered shareholders in Uganda, a fraction of the country's estimated 40m population.

Bwiso noted that the USE is carrying out investor education to attract more Ugandans to buy, sell or even raise money through the bourse. 

The USE had 16 listed companies with shares worth sh23.5 trillion at the close of business on Thursday.