2019-05-01

  • Corporate Law
  • Capital Markets Law

The Insider Trading Regulatory Framework In Uganda’s Capital Markets: Challenges And Opportunities For Reform

Article by Prosscovia Nambatya

Abstract

Uganda’s Capital Markets Authority Act and the Uganda Securities Exchange Insider Trading Rules prohibit the use of non-public pricesensitive information to trade, 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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