Kampala, Uganda | THE INDEPENDENT | Statutory authorities involved in the financial sector regulation have admitted that some of the business cooperators find it a burden to comply with the requirements of the different regulators.
With new businesses coming up, including cryptocurrency trade, collective investment schemes and use of trading agencies, as well as technological advancements, entrepreneurs are finding themselves under multiple regulatory regimes.
Some of these include the collective investment schemes, CIS, which have to be regulated by the Capital Markets Authority CMA, the Uganda Retirement Benefits Regulatory Authority, URBRA, as well as the Bank of Uganda.
Miriam Musaali, the Legal and Compliance Manager at CMA says that this over-regulation does not only create confusion but is also a cost addition for the enterprises which also spend more time processing compliance requirements.
She was speaking on Wednesday at Stanbic Bank’s “investor client services” event under the theme; “Emerging Trends in the Investor Services Business.”
This was meant for the industry leaders and regulators to discuss the legislative and regulatory environment supporting custody services business in Uganda and the relevance of custody services in the client’s investment value chain and more.
Emerging trends include the evolving marketplace, changing consumer behavior, and technological disruptions and opportunities.
These call for the need of new products, like digital investments, and IT solutions for trading, settlement, and accounting to enhance operational efficiency and risk mitigation in the entire value chain.
Stanbic Bank, which offers investor services like asset management, says on their part they have only three regulators.
Andrew Omiel, Head, Investor Services and Financial Institutions says that so far, regulation does not overlap or interfere with their business operations.
Financial sector industries include banking, asset wealth management, asset custody, electronic finance, and FinTech among others.
In Uganda, some of the regulatory authorities are the Bank of Uganda, the Uganda Microfinance Regulatory Authority, the Capital Markets Authority, the Insurance Regulatory Authority, the Uganda Retirement Benefits Regulatory Authority, and the Financial Intelligence Authority among others.
An enterprise falls under one or more of the authorities depending on the kind of business it offers, and each regulatory body will set its own terms and conditions on the business.
Musaali says that for now, there is a need for the agencies to cooperate in their regulatory roles so as to be efficient, but also reduce the burden on the organizations being regulated.
One of the critical businesses that have remained under no direct regulation is cryptocurrency trade, a growing virtual currency business.
This has seen many Ugandans make losses without knowing who to run to, with the Bank of Uganda clearly stating that any Ugandan dealing with cryptocurrency traders does so at their own risk.
Most losses have come from Ponzi or pyramid schemes that use cryptocurrency as their medium of operation, instead of ordinary currencies like the shilling or dollar.
Musaali says that apart from cryptocurrency, Musaali adds gold as a source of investment, which also needs to be regulated, because currently, every regulator denies responsibility.
URBRA Chief Executive Officer, Martin Nsubuga admits that regulation always lags behind development but that they will always catch up with regulation.
Discussions are ongoing between the three main regulators, CMA, BOU, and URBRA to harmonize some aspects of regulation.
Nsubuga says this will answer some of the concerns that the business operators face.