Bank of Uganda has today on Thursday appointed United Bank for Africa (UBA) as the country’s primary dealer.
Confirmed on September 16, 2021, UBA is now licensed to trade government securities of Bonds and Treasury Bonds to investors.
UBA is the 8th Bank to be licensed as a primary dealer by Bank of Uganda other banks being ABSA Bank, Bank of Baroda, Centenary Bank, dfcu Bank, Housing Finance Bank, Stanbic Bank and Standard Chartered Bank.
The role of Primary Dealer Banks is to ‘lend Government Money on behalf of the public and in exchange provide Treasury Bills and Bonds as collateral, in the primary market auction’.
“The Primary Dealer Banks are thereafter expected to facilitate the buying and selling of Treasury Bills and Bonda to investors who do not have access to Primary market.” Said Bank of Uganda Governor Emmanuel Mutebire in a statement.
The primary market of government bonds and treasury bills is Uganda Securities Exchange (USE) which is regulated by Capital Markets Authority, with concentration of Stock Brokers and USE offices in the city, government is creating secondary markets which can be easy to reach to investors countrywide and thus establishing dealer banks.
In February 2019, the government of Uganda in a statement guaranteed to further disseminate securities like bonds and treasury bills to Mobile Money services where investors will able to buy bonds and treasury bills directly via Mobile Money, however this is yet to be realized.
UBA will officially start its role as a primary dealer bank on October 1, 2021.
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