I. Securities Accounts
Securities Depository Agents (SCDAs) open and maintain Securities Accounts. These comprise Clients' Securities Accounts and Participants' (proprietary/dealers) Securities Accounts which are segregated from each other. Clients' Securities Accounts are opened through and/or registered with a Securities Central Depository Agent (Broker/Dealer, Investment Advisors or Custodian Banks). A Client may open accounts with several Securities Central Depository Agents.
Account opening forms:
II. Statement of Accounts
SCD is mandated to provide client account statements semi annually to all active and non-active clients in the Depository. The SCD provides monthly statements of accounts on request to all holders of active securities accounts. SCD mails these statements of accounts directly to securities account holders at the addresses recorded in the system.
To enjoy this service, simply ensure that we have your correct and up to date email address. Once in place, send your SCD account name, account number, ID/Passport number used to open this account to your broker and your email will be updated
Investors receive regular statements detailing their electronic holdings and, as these statements are not negotiable instruments, investors need not worry about loss or duplication of such statements.
Clients can request for statements as and when they so wish to enable them monitor their accounts. All such requests will be at a fee of Ugx 3,000 per statement.
SCD accepts deposits of securities certificates from Clients through SCDAs. To use the SCD Depository services, the investor opens a Securities accounts in the SCD system through a SCDA. Deposited certificates are submitted to the registry for verification before they are confirmed and authorized in the SCD. Clients' Securities Accounts are credited only upon receipt of the written confirmation of the authenticity of the deposited certificates from the registry. This process eliminates the risk of introducing invalid securities in the SCD system.
Clients can withdraw securities from the SCD by submitting a request through the relevant SCDA. Upon withdrawal, the Client Securities Account is debited and the issuer's registry is instructed to issue a certificate in the name of the client.
V. Pledges & Releases
The Depository Services also include the recording of pledges in favour of lending institutions with the agreement of both the borrower & the lending institution.
This is the process by which shares are used as collateral. A standard pledge form (SCD 5) is completed by the client and approved by the SCDA and the lender. The completed form is delivered to SCD by the SCDA where the securities are frozen and confirmation is done directly to the lender. Once the loan facility has been cleared, a release form (SCD 6) is completed by the lender and the SCDA, and delivered to SCD where the shares are released.
In the records of SCD, a pledgor remains the shareholder of the pledged securities. However, the pledgor cannot access these shares unless the pledgee submits the appropriate pledge release instruction (SCD 6) in accordance with SCD Procedures. The shares remain in a frozen state on the pledgor’s account.
An investor may have more than one account, by registering his/her SCD account with Securities Central Depository Agents. The investor can transfer securities among these accounts by making the request through the relevant Securities Central Depository Agents.
The Securities Central Depository has an inter-depository transfer mechanism where securities of a primary jurisdiction can be transferred to a secondary market. This mechanism has been established between the Ugandan and Kenyan depositories, to allow for shares to be transacted to a market of the client’s choice.
VIII. Initial Public Offers – Direct crediting of Securities
The Clients will, if they already have a securities account in the depository, indicate the account number on the application form. If they do not already have an account, they will open one and the number will be indicated on the application form.
Upon completion of an IPO, the Shares Registrar provides SCD with an allotment schedule indicating the respective SCD account numbers. Thereafter at the close of the Business Day and before the trade date SCD credits the clients’ securities accounts with the number of shares allotted to them as per the allotment schedule.
A new issues schedule is made available to the Shares Registrar who in turn will register the securities as per that schedule in the name of SCD and generate a Securities Certificate which will then be forwarded to SCD.
IX. Bonus Issues
The Shares Registrar informs the Securities Exchange and SCD in writing of any proposed Bonus Issue and with the Entitlement Date stated.
Following settlement of all transactions that took place on or before the last cum-date, SCD provides the Shares Registrar with an Entitlement Schedule with respect to shareholders registered as at Entitlement Date.
The Shares Registrar then submits to SCD an Allotment Schedule.
At the close of Business Day before the listing of the new shares, SCD credits the clients’ accounts with the number of Bonus Securities allotted to them.
All clients with paper certificates are credited with bonus shares only after depositing the certificate with the registrar for authentication.
The Shares Registrar informs the Uganda Securities Exchange in writing of the Entitlement Date in respect of dividend payment.
Following settlement of all transactions that took place on or before the last cum-date, SCD provides the Shares Registrar with an Entitlement Schedule with respect to shareholders registered as at the Entitlement Date.
The Shares Registrar then effects payment of dividends to its shareholders.
XI. Rights Issues
The Shares Registrar informs SCD of:
· The Rights Issue,
· The Entitlement Date,
· The period during which the Rights will be traded, and
· The opening and closing dates of application.
Following settlement of all transactions that took place on or before the last cum-date, CDSC provides the Shares Registrar with an Entitlement Schedule with respect to shareholders registered as at the Entitlement Date. The Shares Registrar forwards Provisional Letters of Allotment (PAL) for Securities Account holders indicated on the list.
The Shares Registrar submits to SCD a Rights Allotment Schedule
On the Business Day before the trade date of Rights, SCD credits the relevant Securities Account with the number of Rights as per the Rights Allotment Schedule.
XII. ISIN – Generation
The USE is a member of the Association of National Numbering Agency (ANNA) and is recognized as the National Numbering Agency for Uganda. USE’s depository is responsible for codifying all financial instruments listed on the market by issuing unique ISIN codes in accordance with the ISO-6166 standard. The ISIN codes allocated to listed instruments are shown on all reports generated by the SCD. The CDS also allocates CFI Codes to instruments in accordance with the ISO-10962 standard.