Ugandans holding shares in companies listed at Uganda Securities Exchange can anticipate quicker settlement of transactions after Parliament passed the Securities Central Depositories Bill, 2008.

The bill mandates USE to introduce the quicker method of electronic trading as apposed to the century-old manual trading method where at the sound of a bell, the broker/dealers at the Trading Floor shout orders to the board writer who records the orders on the board. And a transaction occurs when orders are matched.

The system however is slow and brokers can only transfer shares after one week of trading as compared to electronic trading, where a transfer can be completed within a day of trading.

Mr Simon Rutega, the chief executive officer of USE, said all efforts are in place to ensure that by March next year no more manual trading will be done including trade with other countries in the region.

"The infrastructure is available and we are ready to go but now we need to train people again, listed, companies, brokers, and the public on how it is going to work," Mr Rutega said.

Stock brokers and industry analysts say the bill was long overdue. Like other players they say that efficiency, accuracy and speedy trading will make way for the outdated manual trading.

"USE will no longer require evidence of papers as proof of ownership of shares, now electronically your account will be credited within one or two days and if you want you can even begin to sale your shares," Mr Grace Ssemakula, an investment analyst with Africa alliance, said.

Electronic trading will bring Uganda in harmony with Kenya, Rwanda, and Tanzania that have functioning electronic-trading systems.

According to the Finance Committee Chairperson, Mr Tindamanyire Kabondo, the new law will significantly improve the efficiency of trading and reduce the time for the settlement of transactions. "With the electronic trading now we shall be able to operate with maximum efficiency and forget the paper certificate that consumes time and easily gets destroyed," Mr Tindamanyire said.

The move is also a positive step towards integration of East African stock markets. The CEOs of USE, Nairobi Stock Exchange, and Dar es Salaam Stock Exchange have been towing with the idea of integrating the three markets but the initiative was delayed because of manual trading at USE.

"The policy behind the new law is to establish regulated securities and central depositories in order to improve the method of trading and settlement of transactions at the Uganda Securities exchange," the Minister in charge of Privatisation, Ms Rukia Chekamondo, said.

According to the minister, the capital market in Uganda has over the years traded using manual platforms and its system has become outdated considering the exponential growth in the volumes and levels of activities USE since Stanbic Bank was listed.

The Bill among other things aims at protecting investors by setting minimum standards of operation by securities central depositories, providing for offences and prescribing penalties that contravene the provisions of the Bill.