Walter Wafula
24 October 2008
Kampala — Uganda and Ghana have signed a regulatory pact to boost their efforts in protecting buyers and sellers of financial securities like shares and bonds in their respective capital markets.
The two countries signed a Memorandum of Understanding through their capital markets regulatory bodies; The Securities and Exchange Commission (SEC) of Ghana and Uganda's Capital Markets Authority (CMA) in Kampala, on Monday.
Addressing journalists at the ceremony, Mr Japheth Katto, the Chief Executive officer CMA said the MoU will provide a framework for the exchange of information about Uganda and Ghana's capital markets for the purpose of the regulators' respective jurisdictions.
"We need to protect these markets. They are young markets, they are developing, they are small in size, the legal framework is nascent, and the market infrastructure is not fully developed," Mr Katto said before signing the pact on behalf of Uganda. Uganda's market is just 10 years old and Ghana's is less than 30 years unlike markets like the New York Stock Exchange and London Stock Exchange, in advanced economies which have been in existence for more than 100 years.
He added that the two markets have a lot in common and therefore the need to protect them from malpractices or fraud that exists in securities markets. "This will work towards the development of good standards aimed at mitigating negative factors in global financial markets... to make our markets stronger particularly in the development stage."
The MoU will cover investigation and enforcement in connection with applicable regulations relating to both countries, monitoring of compliance with laws relating to the duties of the issuers of financial products in relation to information disclosure, and supervision of the financial markets, including, clearing, settlement, the monitoring and surveillance of transaction in financial products.
Commenting on the agreement, Dr Nii Kwaku Sowa, the Director General of The Securities and Exchange Commission acknowledged that it's very important for countries in Africa to link up together in order to come to an understanding on to how to regulate the market and various instruments which are traded in the markets.
"On our part, it has become even more important because we cannot be everywhere at a particular time. Our markets are still developing so we don't have the eyes and oversight to be able to see all that we should be seeing," he said.
Some of the securities and players in the Ghanaian market he said are very mobile and have the ability to across boundaries of different nations which calls for the need to have partnerships to coordinate their regulatory work.
"We have some of the players who are already on the Ugandan market and I am sure that in the near future, we shall have some players from the Uganda market also having interest in the Ghanaian market. If we want to develop our two markets then we should link up on the regulatory side also."
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