The Bank of Uganda (BoU) hereby announces that all licensed commercial banks now have direct access to the primary market for Government security operations.
This means all 24 commercial banks licensed by BoU are now eligible to open CSD accounts at BoU for their clients, issue and accept bid submission forms on their 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. BoUhas been working with various stakeholders on reforms to the Primary Dealership system toimprove the distribution mechanism for Government Securities.
In a move meant to overhaul Uganda securities market, the Central Bank Governor has revised guidelines for investing in government securities.
A primary dealer is a well-capitalised financial institution that has an undertaking with the Central Bank to facilitate Open Market Operations as well as be the conduit for market making.
Speaking to media today the Governor Bank of Uganda Prof. Tumusiime Mutebile said all the 24 licensed banks will now have direct access to the Central Securities Depository.
Mutebile says the total turnover in the secondary market increased by 12.5% to 3.6 trillion from 3.5 trillion in 2015 which has increased government liquidity.
He explains that the changes are meant to increase liquidity
There have been six Primary Dealer banks namely Stanbic Bank, Standard Chartered Bank, dfcu Bank, Barclays Bank, Bank of Baroda and Centenary Bank which are the first contact with BoU. All other banks have been operating in the secondary market, meaning they play second fiddle to the primary dealers.
Meanwhile, Stanbic Bank has again been declared winner of this year’s Annual Primary Dealers’ Award, a position it has maintained for five consecutive years.