MAKERERE LAW JOURNAL

THE INSIDER TRADING REGULATORY FRAMEWORK IN UGANDA’S CAPITAL
MARKETS: CHALLENGES AND OPPORTUNITIES FOR REFORM

 

Prosscovia Nambatya

 

Abstract

Uganda’s Capital Markets Authority Act and the Uganda Securities
Exchange Insider Trading Rules prohibit the use in trade of non-public price-sensitive
information by an insider, an associate of an insider
or a tippee. But this prohibition—based on the need to ensure orderly,
fair and transparent trading in securities of listed entities—falls short in
many respects. This article points out the loopholes in Uganda’s laws on
insider trading by making comparative analyses with other jurisdictions
as well as internationally applied standards. Despite the existence of
capital markets in Uganda for over 20 years, the Authority and Exchange
have not prosecuted any cases of insider trading—a fact that suggests
either a factual absence of the vice, or an inadequacy of the legal
framework coupled with inefficiency of the Exchange and the Authority’s
enforcement arms. The latter is the more probable explanation, and
reform is necessary.

 

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