July 4, 2017 No Comments
Uganda Bonds Investment Made Easy
The Bank of Uganda (BoU) has eased the the process of investing in government bills and bonds. According to the new directive all licensed commercial banks now have direct access to the primary market for Government security operations.
Uganda has a total of 24 commercial banks licensed by Bank of Uganda. All these banks are now to:
- Open central securities depository (CSD) accounts at Bank of Uganda for their clients,
- Issue and accept bid submission forms on their clients behalf,
- Settle their clients’ successful bids and buy their clients’ securities if the client wishes to sell.
“This is part of Bank of Uganda’s ongoing commitment to make investing in government securities easier and more accessible to the public,” According the Bank of Uganda Governor Professor Tumusiime-Mutebile.
The Bank of Uganda has been working with various stakeholders on reforms to the Primary Dealership system to improve the distribution mechanism for Government Securities.
How the new Changes in Uganda bonds investment will work
Investors who want to open a central securities depository central securities depository account in order to trade in Treasury Bills or Bonds can pick account opening forms from the Bank of Uganda banking hall and website.
Investors can also pick forms from any branch of their commercial bank around the country.
Instead of filling in multiple forms to open a central securities depository (CSD) account, there will now be a simplified two-page central securities depository account opening form.
After the closure of a Primary auction, an investor is free to trade Government securities they already own in a market known as a secondary market. A client can now go to any commercial bank where they have an account if they want to sell their securities in the secondary market before they mature.
Furthermore, if a client fails to sell their securities in the secondary market, they can sell them to Bank of Uganda through a process called re-discounting of Treasury Bills and Bonds.
In the case where clients want to find out whether the price they are selling or buying their securities in the secondary market is reasonable, they can visit the Bank of Uganda’s website under the Financial Markets tab for a guide to pricing in the secondary market.