A brief overview of the Key Changes to the Uganda Securities Exchange Rules, 2025
The Uganda Securities Exchange (USE) has introduced significant amendments to its Listing Rules; Fees, Charges & Penalties Rules; and Trading Rules 2021, all of which took effect on 25 February 2025. These changes are aimed at strengthening regulatory oversight, improving market transparency, and introducing enhanced compliance requirements for issuers and trading participants at the USE.
Changes to the USE Listing Rules 2025
Suspension of securities:
The new Listing Rules retain their seven-part structure but introduce a number of significant changes. One key change is in Rule 4(2) of the Listing Rules, which now makes the suspension of listed securities discretionary, rather than mandatory, allowing the Exchange to consider a wider range of factors. A security may now be suspended if the issuer is placed under liquidation, statutory management, or receivership, if it fails or refuses to comply with the Rules, or if it has already been suspended in its primary market.
Widening of the penal provisions for non- compliant entities:
In a further push for compliance, Rule 9(1) of the Listing Rules expands the penalties for issuers who violate the Listing Rules. In the old rules, the imposition of fines by the USE was capped at 200 (two hundred) currency points. Under the Ugandan Constitution of 1995, as amended, a currency point is the equivalent of UGX 20,000 (Uganda Shillings Twenty Thousand). The new penalties will now be imposed in accordance with Rule 29 of the USE Fees, Charges & Penalties Rules, which allows for higher sanctions and penalties.
Enhanced disclosure and transparency requirements:
The new Rules also place greater emphasis on disclosure and transparency. Rule 36(4) of the Listing Rules, introduces a structured format for publishing notices and announcements, requiring them to be placed in a nationally circulated daily newspaper. Furthermore, notices related to financial statements must also conform to International Financial Reporting Standards (IFRS). Similarly, Rule 42(4) of the Listing Rules, introduces a dual reporting mechanism in instances, where an issuer is required by a regulator or another exchange to publish interim or quarterly reports, the same disclosures must also be provided to the USE.
Repeal of the USE Listing Rules of 2021:
Finally, Rule 54 of the Listing Rules repeals the 2021 Listing Rules, making way for the 2025 framework to take full effect from the 25th day of February 2025. The new rules do not contain any saving provisions, which implies that the old rules have been rendered obsolete.
Changes to the Fees, Charges & Penalties Rules:
As highlighted earlier, the 2025 USE Fees, Charges & Penalties Rules introduce stricter penalties for non-compliance. Under Rule 20(1) thereof, the financial penalties for issuers have been revised significantly.
Doubling of the fine for late submission of audited accounts:
The fine for late submission of annual audited accounts has doubled from 500 (five hundred) to 1,000 (one thousand) currency points, while late submission of interim (semi-annual) accounts will now attract 750 (seven hundred fifty) currency points, up from 500 (five hundred) currency points. Issuers who delay notifying the Exchange about key corporate events (as defined in the rules) will also face an increased penalty of 350 (three hundred fifty) currency points, up from 250 (two hundred fifty) currency points.
Threats to market integrity:
In addition to these increased penalties, Rule 20(2) of the USE Fees, Charges & Penalties Rules, introduces a new element of public accountability. In cases of severe misconduct or threats to market integrity, the USE may now publicly disclose non-compliance penalties on its website, further incentivizing adherence to regulatory requirements.
Introduction of new fees for services provided by the Securities Central Depository:
The amendments introduce new fees under Rule 27 of the Uganda Securities Exchange (USE) Fees, Charges & Penalties Rules for services provided by the Securities Central Depository (SCD). These fees are:
- 1.5 currency points for a Certificate of Balance.
- 2.5 currency points for an Audit Confirmation.
- 1 currency point for a Letter of Introduction.
For trading participants, Rule 29(1)(b) of the USE Fees, Charges & Penalties Rules introduces stricter financial consequences for rule violations. Previously, breaches with no specific penalty incurred a flat fine of 500 currency points. Under the amended Rules, this penalty is now a discretionary range of 500 to 1,500 currency points, depending on the severity of the violation. The USE will consider factors such as:
- Market impact.
- Intent.
- Past violations.
- Cooperation in remedial measures.
- Mitigating factors.
These factors will be used to determine the appropriate penalty within the specified range.
Changes to the USE Trading Rules 2025:
The new Trading Rules 2025 replace the 2021 Trading Rules, bringing key changes that affect how securities are traded on the Exchange. One major amendment comes in Rule 42(1) of the USE Trading Rules, which tightens daily price movement limits for equity securities. Previously, share prices could move up to 15% in either direction within a single trading session. Under the new framework, this limit has been reduced to 10%, ensuring more controlled price fluctuations and reducing market volatility.
Further adjustments to price movement regulation appear in Rule 42(6) of the USE Trading Rules, which grants the USE Chief Executive Officer discretionary powers to modify trading limits. However, this authority must be exercised cautiously, with stakeholder consultations and approval from the Board of Directors, ensuring transparency and accountability in the process.
Additionally, Rule 3 of the USE Trading Rules, omitted the definition of a Board Reference Price.
Conclusion
The amendments introduced in the USE Rules 2025 reflect a broader commitment to enhancing market stability, investor confidence, and regulatory compliance. By increasing penalties, reinforcing transparency measures, and refining trading parameters, the Uganda Securities Exchange is moving toward a more robust capital market environment. Market participants should familiarize themselves with these changes to ensure compliance and avoid regulatory pitfalls.
Disclaimer:
The information provided in this article is for general informational purposes only and should not be construed as legal advice. If you have specific legal question(s) or concern(s), please contact the authors and/or a qualified legal professional directly for guidance.
Authors:
Arnold Lule Sekiwano
Partner, Corporate, Banking & Projects
Awano Collette Melvina
Legal Assistant, Corporate