Bank of Uganda | Investing In Government Securities Now Easier And More Accessible To The Public
KAMPALA – Monday December 27, 2016 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 25 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.
Now prospective investors who want to open a CSD account in order to trade in Treasury Bills or Bonds can now pick account opening forms not only from the Bank of Uganda banking hall and website, but also from any branch of their commercial bank around the country.
Instead of filling in multiple forms to open a CSD account, there will now be a simplified two-page CSD account opening form. Also, investors who wish to participate in an auction where Government securities are first issued can now pick and submit bid submission forms at any branch of their commercial bank.
After the closure of a Primary auction, an investoris 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.