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Financial Institutions (Foreign Exchange Business) Rules

Statutory Instrument 47 of 2010 Current version · as at 12 November 2010
Enacted2010
Commenced—
Last amended—
Point-in-time consolidation · as at 12 November 2010. This page may not reflect amendments made after that date. Confirm the current position against the latest Uganda Gazette before relying on it.

About this Act

A full descriptive summary for this Act has not been recorded yet.

Jurisdiction
Uganda
Type
Principal Legislation
Status
In force
Language
English

Full text of the Act

4 parts · 15 sections · 2 Schedules

Enhanced Annotated View adds approved, source-linked propositions, operative requirements, judicial passages, related provisions, amendment notes and authority status. Choose Original PDF to inspect the source consolidation.

Uganda

Financial Institutions (Foreign Exchange Business) Rules

[This is the version of this document at 12 November 2010.]

Part III

10. Offences

The text of this section isn't in the consolidation we hold — see the original PDF above.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Governing rule

This section states the governing statutory rule for “Offences”.

“Offences”
Primary legislation Source quotation matched
Practical effect

Use this section as the starting statutory rule for “Offences”, together with the linked provisions and current consolidation.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

0

This section states a single governing proposition and does not enumerate separate elements.

Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
11. Remedial measures and administrative sanctions

The text of this section isn't in the consolidation we hold — see the original PDF above.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Governing rule

This section states the governing statutory rule for “Remedial measures and administrative sanctions”.

“Remedial measures and administrative sanctions”
Primary legislation Source quotation matched
Practical effect

Use this section as the starting statutory rule for “Remedial measures and administrative sanctions”, together with the linked provisions and current consolidation.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

0

This section states a single governing proposition and does not enumerate separate elements.

Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
12. Suspension of foreign exchange business

SCHEDULES Schedule 1- Daily foreign exchange exposure monitoring return Schedule 2- Foreign Exchange placements in Banks and Financial Institutions Abroad.

S T A T U T O R Y I N S T R U M E N T S

2010 No. 74.

The Financial Institutions (Foreign Exchange Business) Rules, 2010 (Under section 40 (1) of the Financial Institutions Act, 2004, Act No 2 of 2004)

In exercise of the powers conferred on the Central Bank by section 40 (1) of the Financial Institutions Act, 2004, these Rules are made this 16th day of September, 2010.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Governing rule

This section states the governing statutory rule for “Suspension of foreign exchange business”.

“SCHEDULES Schedule 1- Daily foreign exchange exposure monitoring return Schedule 2- Foreign Exchange placements in Banks and Financial Institutions Abroad.”
Primary legislation Source quotation matched
Practical effect

Use this section as the starting statutory rule for “Suspension of foreign exchange business”, together with the linked provisions and current consolidation.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

0

This section states a single governing proposition and does not enumerate separate elements.

Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions
Financial Institutions Act
Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history

Part I

1. Title and application
(1)

These Rules may be cited as the Financial Institutions (Foreign Exchange Business) Rules, 2010.

(2)

These Rules apply to all financial institutions authorised by the Central Bank to conduct foreign exchange business.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Scope rule

This section defines when and how “Title and application” applies.

“(1) These Rules may be cited as the Financial Institutions (Foreign Exchange Business) Rules, 2010.”
Primary legislation Source quotation matched
Practical effect

Confirm that the matter and forum fall within this section before applying the Act's remaining provisions.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

2
  1. (1) These Rules may be cited as the Financial Institutions (Foreign Exchange Business) Rules, 2010.
  2. (2) These Rules apply to all financial institutions authorised by the Central Bank to conduct foreign exchange business.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
2. Interpretation In

these Rules, unless the context otherwise requires- "authorised financial institution" means a financial institution authorised by the Central Bank to conduct foreign exchange business; "core capital" means permanent shareholder equity in the form of issued and fully paid-up shares plus all disclosed reserves, less goodwill or any intangible assets; "correspondent financial institution" means a foreign bank or other financial institution outside Uganda that holds deposits or performs correspondent banking or financial services for and on behalf of a financial institution in Uganda; "foreign currency" means a currency other than legal tender of Uganda;

"foreign currency account" means an account denominated in foreign currency maintained with an authorised financial institution; "foreign exchange" is synonymous with foreign currency and includes- (a) banknotes, coins or electronic units of payment in any currency other than the currency of Uganda which are legal tender outside of Uganda; (b) financial instruments denominated in foreign currency; and (c) any right to receive such banknotes or coins in respect of any balance at a financial institution located within or outside of Uganda; "foreign exchange business" means a facility offered, business undertaken or transactions executed with any person involving a foreign currency inclusive of any account facility, credit extension, lending, issue of guarantee, counter-guarantee, purchase or sale by means of cash, cheque, draft, transfer or any other instrument denominated in a foreign currency; "forward transaction, forward purchase, forward buy or forward sale" means transactions executed after more than two working days from the date the transaction is contracted or agreed;

"foreign currency assets" means to all assets denominated in foreign currency;

"foreign currency deposits" means deposit liabilities of customers of a financial institution;

"foreign currency liabilities" means all liabilities denominated in foreign currency;

"inter-bank foreign exchange market" means the market in which spot, forward, futures or other foreign exchange trading mechanisms operate;

"international rating agencies" means internationally recognised rating firms such as Standard and Poors and Moody's; "long position or long open position or overbought position of a financial institution in a foreign currency" means the holding by the financial institution of foreign currency for its own account in excess of all its contractual spot, same day value and forward transaction commitments in a foreign currency; "mid-rate" means the mid-point of the buying and selling of exchange rates in foreign currency prevailing as at the close of business;

"net open position of a financial institution in a foreign currency" means the sum of all its assets and liabilities inclusive of all its spot, same day value and forward transactions and its off- balance sheet commitments in that foreign currency;

"off-balance sheet items" includes all items not shown on the balance sheet but which constitute credit risk and such other risks as in guarantees, acceptances, performance bonds ,letters of credit and other off-balance sheet items deemed to constitute risk as such by the Central Bank;

"same day transaction", "same day purchase", "same day but" or 'same day sale" means a transaction having a same day value;

"same day value" means a transaction to which it is referred is to be executed on the very day it is contracted or agreed;

"short position, short open position or oversold position of a financial institution in a foreign currency" means that the holding by the financial institution of that foreign currency for its own account is less than all its contractual spot, same day value and forward transaction commitments in that foreign currency;

"spot transaction", "spot purchase", "spot buy" or "spot sale" means a transaction having a spot value;

"spot value" means the transaction to which it is referred is to be executed within two working days from the date it is contracted or agreed; "significantly under-capitalised" means a financial institution which does not hold minimum capital funds unimpaired by losses, core capital or total capital of at least fifty percent of the requirement under sections 26 and 27 of the Financial Institutions Act, 2004; and "value date of a transaction" means the date on which it is to be executed.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Definition

This section supplies the definitions or statutory meaning governing “Interpretation In”.

“these Rules, unless the context otherwise requires- "authorised financial institution" means a financial institution authorised by the Central Bank to conduct foreign exchange business; "core capital" means permanent shareholder equity in the form of issued and fully paid-up shares plus all disclosed reserves, less goodwill or any intangible assets; "correspondent financial institution" means a foreign bank or other financial institution outside Uganda that holds deposits or performs correspondent banking or…”
Primary legislation Source quotation matched
Practical effect

Use this definition when interpreting other provisions that employ the language addressed by “Interpretation In”.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

13
  1. "foreign currency account" means an account denominated in foreign currency maintained with an authorised financial institution; "foreign exchange" is synonymous with foreign currency and includes- (a) banknotes, coins or electronic units of payment in any currency other than the currency of Uganda which are legal tender outside of Uganda; (b) financial instruments denominated in foreign currency; and (c) any right to receive such banknotes or coins in respect of any balance at a financial institution located within or outside of Uganda; "foreign exchange business" means a facility offered, business undertaken or transactions executed with any person involving a foreign currency inclusive of any account facility, credit extension, lending, issue of guarantee, counter-guarantee, purchase or sale by means of cash, cheque, draft, transfer or any other instrument denominated in a foreign currency; "forward transaction, forward purchase, forward buy or forward sale" means transactions executed after more than two working days from the date the transaction is contracted or agreed;
  2. "foreign currency assets" means to all assets denominated in foreign currency;
  3. "foreign currency deposits" means deposit liabilities of customers of a financial institution;
  4. "foreign currency liabilities" means all liabilities denominated in foreign currency;
  5. "inter-bank foreign exchange market" means the market in which spot, forward, futures or other foreign exchange trading mechanisms operate;
  6. "international rating agencies" means internationally recognised rating firms such as Standard and Poors and Moody's; "long position or long open position or overbought position of a financial institution in a foreign currency" means the holding by the financial institution of foreign currency for its own account in excess of all its contractual spot, same day value and forward transaction commitments in a foreign currency; "mid-rate" means the mid-point of the buying and selling of exchange rates in foreign currency prevailing as at the close of business;
  7. "net open position of a financial institution in a foreign currency" means the sum of all its assets and liabilities inclusive of all its spot, same day value and forward transactions and its off- balance sheet commitments in that foreign currency;
  8. "off-balance sheet items" includes all items not shown on the balance sheet but which constitute credit risk and such other risks as in guarantees, acceptances, performance bonds ,letters of credit and other off-balance sheet items deemed to constitute risk as such by the Central Bank;

5 further items remain in the statutory text above.

Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions
Financial Institutions Act
Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
3. Purpose of Rules The purpose of these Rules is
(a)

to minimise foreign exchange risk by preventing the taking of excessive foreign currency positions that may expose the financial institution to foreign exchange risks and potential for losses; (b) to enable financial institutions to play an active role in the development of foreign exchange market and instruments in the Ugandan economy; (c) to facilitate foreign exchange based lending while at the same time minimising credit and liquidity risks inherent in such type of lending; (d) to minimise risks arising from concentration of foreign exchange placements or deposits abroad; (e) to ensure that financial institutions have put in place adequate foreign exchange risk management systems, appropriate operational guidelines and internal controls intended to identify and control foreign exchange risks; (f) to limit foreign exchange exposures as a necessary and significant component of financial institutions' internal controls and overall foreign exchange risk management system;

(g)

to regulate financial institution lending in foreign currency to ensure that they are able to manage the additional foreign exchange and country risks inherent in those loans; and (h) to minimise risks that financial institutions are exposed to due to concentration risks inherent in excessive placements of foreign exchange with their correspondent banks.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Statutory power

This section confers or regulates the statutory power described as “Purpose of Rules The purpose of these Rules is”.

“(a) to minimise foreign exchange risk by preventing the taking of excessive foreign currency positions that may expose the financial institution to foreign exchange risks and potential for losses; (b) to enable financial institutions to play an active role in the development of foreign exchange market and instruments in the Ugandan economy; (c) to facilitate foreign exchange based lending while at the same time minimising credit and liquidity risks inherent in such type of lending; (d) to minimise risks arising…”
Primary legislation Source quotation matched
Practical effect

The power must be exercised by the authorised decision-maker, within the conditions and purpose stated in the section.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

2
  1. (a) to minimise foreign exchange risk by preventing the taking of excessive foreign currency positions that may expose the financial institution to foreign exchange risks and potential for losses; (b) to enable financial institutions to play an active role in the development of foreign exchange market and instruments in the Ugandan economy; (c) to facilitate foreign exchange based lending while at the same time minimising credit and liquidity risks inherent in such type of lending; (d) to minimise risks arising from concentration of foreign exchange placements or deposits abroad; (e) to ensure that financial institutions have put in place adequate foreign exchange risk management systems, appropriate operational guidelines and internal controls intended to identify and control foreign exchange risks; (f) to limit foreign exchange exposures as a necessary and significant component of financial institutions' internal controls and overall foreign exchange risk management system;
  2. (g) to regulate financial institution lending in foreign currency to ensure that they are able to manage the additional foreign exchange and country risks inherent in those loans; and (h) to minimise risks that financial institutions are exposed to due to concentration risks inherent in excessive placements of foreign exchange with their correspondent banks.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history

Part II

4. Conduct of foreign exchange business A

financial institution shall not conduct foreign exchange business without authorisation from the Central Bank

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Mandatory duty

This section imposes mandatory requirements concerning “Conduct of foreign exchange business A”.

“financial institution shall not conduct foreign exchange business without authorisation from the Central Bank”
Primary legislation Source quotation matched
Practical effect

The provision uses mandatory language; the responsible person or institution should be able to demonstrate compliance.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

1
  1. financial institution shall not conduct foreign exchange business without authorisation from the Central Bank
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
5. Compliance with capital requirements

A financial institution shall not conduct any new foreign exchange business if it is significantly undercapitalised

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Mandatory duty

This section imposes mandatory requirements concerning “Compliance with capital requirements”.

“A financial institution shall not conduct any new foreign exchange business if it is significantly undercapitalised”
Primary legislation Source quotation matched
Practical effect

The provision uses mandatory language; the responsible person or institution should be able to demonstrate compliance.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

1
  1. A financial institution shall not conduct any new foreign exchange business if it is significantly undercapitalised
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
6. Limit on foreign exchange open position
(1)

The daily foreign exchange open position of authorised financial institutions shall lie within (+/-) 25 % of a financial institution's core capital as at the preceding quarter. (2) The overall foreign exchange open position shall be calculated using the "shorthand" method which includes- (a) calculating all net position in each currency and converting the same into shillings equivalent at mid-rate; (b) arriving at the sum of all the net short positions; (c) arriving at the sum of all net long positions; and (d) taking the greater of the absolute value of both sums as the overall foreign exchange open position.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Definition

This section supplies the definitions or statutory meaning governing “Limit on foreign exchange open position”.

“(1) The daily foreign exchange open position of authorised financial institutions shall lie within (+/-) 25 % of a financial institution's core capital as at the preceding quarter. (2) The overall foreign exchange open position shall be calculated using the "shorthand" method which includes- (a) calculating all net position in each currency and converting the same into shillings equivalent at mid-rate; (b) arriving at the sum of all the net short positions; (c) arriving at the sum of all net long positions; and…”
Primary legislation Source quotation matched
Practical effect

Use this definition when interpreting other provisions that employ the language addressed by “Limit on foreign exchange open position”.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

1
  1. (1) The daily foreign exchange open position of authorised financial institutions shall lie within (+/-) 25 % of a financial institution's core capital as at the preceding quarter. (2) The overall foreign exchange open position shall be calculated using the "shorthand" method which includes- (a) calculating all net position in each currency and converting the same into shillings equivalent at mid-rate; (b) arriving at the sum of all the net short positions; (c) arriving at the sum of all net long positions; and (d) taking the greater of the absolute value of both sums as the overall foreign exchange open position.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
7. Restrictions on foreign exchange lending The granting of loans and other credit accommodations denominated in foreign currency by a financial institution shall be

subject to the following conditions (a) lending in foreign currency shall have a maximum maturity of not more than one year unless the borrower has a clearly defined income stream in the currency being borrowed that matches the longer-term maturity of the loan;

(b)

lending in foreign currency shall not exceed 80% of a financial institution's total foreign currency deposits at all times; and

(c)

lending in foreign currency to a single borrower or insider shall be subject to the requirements of the Financial Institutions (Limits on Credit Concentration and Large Exposures) Regulations, 2005 and the Financial Institutions (Insider Lending Limits) Regulations, 2005 and shall be aggregated with exposures in local currency after converting the same into shillings at mid-rate in calculating compliance with the prudential limits.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Mandatory duty

This section imposes mandatory requirements concerning “Restrictions on foreign exchange lending The granting of loans and other credit accommodations denominated in foreign currency by a financial institution shall be”.

“subject to the following conditions (a) lending in foreign currency shall have a maximum maturity of not more than one year unless the borrower has a clearly defined income stream in the currency being borrowed that matches the longer-term maturity of the loan;”
Primary legislation Source quotation matched
Practical effect

The provision uses mandatory language; the responsible person or institution should be able to demonstrate compliance.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

2
  1. (b) lending in foreign currency shall not exceed 80% of a financial institution's total foreign currency deposits at all times; and
  2. (c) lending in foreign currency to a single borrower or insider shall be subject to the requirements of the Financial Institutions (Limits on Credit Concentration and Large Exposures) Regulations, 2005 and the Financial Institutions (Insider Lending Limits) Regulations, 2005 and shall be aggregated with exposures in local currency after converting the same into shillings at mid-rate in calculating compliance with the prudential limits.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
8. Restrictions on foreign exchange deposits and

placements with correspondent financial institutions (1) An authorised financial institution shall not establish a new correspondent relationship with any bank or another financial institution abroad without the prior approval of the Central Bank.

(2)

In granting its approval, the Central Bank shall among other things consider the credit risk rating of the correspondent financial institution by international rating agencies.

(3)

An authorised financial institution may deposit or make a placement at any one time with a correspondent financial institution which has a minimum international rating of A and above up to a maximum of 50% of its total capital, except where the parent bank is rated A and above .

(4)

An authorised financial institution may deposit or make a placement at any one time with its parent-bank, related bank or a correspondent financial institution that has a minimum international rating of B up to a maximum of 30% of its total capital.

(5)

An authorised financial institution may deposit or make a placement at any one time with its parent-bank, a related bank or a correspondent financial institution that has an international rating of below B or is unrated up to a maximum of 20% of its total capital.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Statutory power

This section confers or regulates the statutory power described as “Restrictions on foreign exchange deposits and”.

“placements with correspondent financial institutions (1) An authorised financial institution shall not establish a new correspondent relationship with any bank or another financial institution abroad without the prior approval of the Central Bank.”
Primary legislation Source quotation matched
Practical effect

The power must be exercised by the authorised decision-maker, within the conditions and purpose stated in the section.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

4
  1. (2) In granting its approval, the Central Bank shall among other things consider the credit risk rating of the correspondent financial institution by international rating agencies.
  2. (3) An authorised financial institution may deposit or make a placement at any one time with a correspondent financial institution which has a minimum international rating of A and above up to a maximum of 50% of its total capital, except where the parent bank is rated A and above .
  3. (4) An authorised financial institution may deposit or make a placement at any one time with its parent-bank, related bank or a correspondent financial institution that has a minimum international rating of B up to a maximum of 30% of its total capital.
  4. (5) An authorised financial institution may deposit or make a placement at any one time with its parent-bank, a related bank or a correspondent financial institution that has an international rating of below B or is unrated up to a maximum of 20% of its total capital.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history
9. Reporting requirements
(1)

An authorised financial institution shall submit to the Central Bank a report to monitor their compliance with the limit on foreign exchange open position titled "Daily Foreign Exchange Exposure Monitoring Return" set out in Schedule 1 to these Rules not later than 11.00 a.m. on the business day following the day to which the report pertains.

(2)

An authorised financial institution shall submit to the Central Bank on a monthly basis a report to monitor their compliance with the restrictions on foreign exchange deposits and placements as set out in Schedule 2 to these Rules on the 15th day of the month to which the report pertains.

(3)

An authorised financial institution shall submit to the Central Bank the following additional reports-

(a)

a daily report of its forex transactions;

(b)

a monthly report of its forex currency position; and

(c)

a schedule of its forex commitments.

Section analysis Source-linked statutory analysis Source linked
Approved statute annotation. Statutory quotations are matched to this consolidation and judicial passages are linked to judgments. Check the primary sources alongside this analysis.
What this section does
Mandatory duty

This section imposes mandatory requirements concerning “Reporting requirements”.

“(1) An authorised financial institution shall submit to the Central Bank a report to monitor their compliance with the limit on foreign exchange open position titled "Daily Foreign Exchange Exposure Monitoring Return" set out in Schedule 1 to these Rules not later than 11.00 a.m. on the business day following the day to which the report pertains.”
Primary legislation Source quotation matched
Practical effect

The provision uses mandatory language; the responsible person or institution should be able to demonstrate compliance.

Deterministic editorial synthesis — not a substitute for the statutory text Editorial synthesis approved
Elements or requirements

Operative requirements extracted from the consolidated text.

6
  1. (1) An authorised financial institution shall submit to the Central Bank a report to monitor their compliance with the limit on foreign exchange open position titled "Daily Foreign Exchange Exposure Monitoring Return" set out in Schedule 1 to these Rules not later than 11.00 a.m. on the business day following the day to which the report pertains.
  2. (2) An authorised financial institution shall submit to the Central Bank on a monthly basis a report to monitor their compliance with the restrictions on foreign exchange deposits and placements as set out in Schedule 2 to these Rules on the 15th day of the month to which the report pertains.
  3. (3) An authorised financial institution shall submit to the Central Bank the following additional reports-
  4. (a) a daily report of its forex transactions;
  5. (b) a monthly report of its forex currency position; and
  6. (c) a schedule of its forex commitments.
Judicial interpretation

Express propositions in source-matched passages from judgments citing this section.

0

No judgment in the current Wakilii corpus expressly cites this section. Bare rule-number references are not assigned where the Order cannot be verified.

Related provisions

No express internal or cross-Act reference appears in this section.

Amendment notes

No section-specific amendment note or instrument-level amendment history appears in this consolidation.

Authority status: legislation is primary authority; judgment weight follows the displayed court level and the ratio caveat. Check version history

Part III

10. Offences
(1)

A person who contravenes these Rules or any other law applicable to the conduct of foreign exchange business commits an offence and is liable on conviction to a fine not exceeding two hundred and fifty currency points or imprisonment not exceeding two years or both.

(2)

An authorised financial institution that conducts any new foreign exchange business while it is significantly under-capitalised commits an offence and shall be liable to a fine not exceeding two hundred and fifty currency points for each day on which the offence continues.

(3)

An authorised financial institution whose overall foreign exchange open position exceeds the limit prescribed in these Rules shall pay to the Central Bank a civil penalty of one percent of the excess net open position per day on which the contravention continues.

(4)

The non-compliant by a financial institution shall, before the penalty is applied, be given 12 hours within which to correct its position and to explain to the Central Bank the reasons that led to such noncompliance.

(5)

An authorised financial institution that fails to submit the returns prescribed in these Rules in a timely and accurate manner shall pay to the Central Bank a civil penalty of fifty currency points for each day on which the contravention continues.

(6)

An authorised financial institution which provides false information in the returns to the Central Bank commits an offence and is liable on conviction to a fine not exceeding two hundred and fifty currency points for each day on which the return remains uncorrected.

11. Remedial measures and administrative sanctions
(1)

When the Central Bank determines through an inspection that a financial institution is not in compliance with these Rules, it may impose any of its enforcement powers under section 82 of the Act.

(2)

The Central Bank may impose any or all of the administrative sanctions with regards to a financial institution that is not in compliance with these Rules including-

(a)

suspension from participation in the inter-bank foreign exchange operations;

(b)

suspension from accepting foreign exchange deposits;

(c)

suspension of the privilege to issue letters of credit;

(d)

suspension of authority to grant credit facilities in foreign exchange; or

(e)

revocation of the licence to conduct foreign exchange business.

12. Suspension of foreign exchange business The Central Bank may, in accordance with

the provisions of section 43 of the Act, suspend a financial institution from conducting foreign exchange business if the financial institution is under any criminal investigation concerning its dealings in foreign exchange SCHEDULE 1

DAILY FOREIGN CURRENCY EXPOSURE MONITORING RETURN

Rule 9(1) AUTHORISED DEALER Date: ………………………… (In Thousands) SINGLE CURRENCY EXPOSURE Overall Exposure US$ UK YEN EURO TShs KShs Rand Others

I FOREIGN EXCHANGE ASSETS (+) (a) Currency on hand (b) Due from banks abroad (Nostro) (c) Cheques and items in transit (d) Loans and advances (e) Accrued Interest receivable (f) Other assets II FOREIGN EXCHANGE LIABILITIES (-) (a) Due to banks abroad (b) Foreign currency deposits (c) Loans payable (d) Accrued interest payable (e) Other liabilities III OFF-BALANCE SHEET (a) Undelivered spot purchases (+) (b) Undelivered spot sales (-) (c) Forward purchase (+) (d) Forward sales (-) (e) Options, swaps, derivatives (+)/(-) (f) Contingent liabilities (-) (Note 1) (at 20% of recorded value) - Letters of credit - Guarantees - Performance Bonds Other commitments

Other commitments IV FOREIGN EXCHANGE POSITION (a) Net Long(+)/Short(-) Position in FX Currency (b) Exchange Rate in Shillings (Mid Rate) (c) Net Position in Shillings V FOREX POSITION LIMIT

(a)

Total Net Long Position (+)

(b)

Total Net Short Position (-) (c) OVERALL EXPOSURE (higher of V( a) & ( b) (d) Exposure limit (25% of core capital) Core capital is Shs (e) EXCESS OVER LIMIT

Note 1 Off-balance sheet items exclude the following guarantees issued by World Bank and other multilateral lending institutions (Please enumerate indicating amount and issuer)

Certified correct ___________________________

Name & signature ___________________________

Position __________________________

SCHEDULE 2 Rule 9(2)

FOREIGN EXCHANGE PLACEMENTS IN BANKS AND FINANCIAL INSTITUTIONS ABROAD

Deadline: Fifteenth day of the month following of reference month Name of Bank / Financial Institution………………………………………… For the month ending…………………………………….…………………… Amount % of NAME OF FOREIGN BANK/ Rating Rating Rating Foreign Shillings Total FINANCIAL INSTITUTION Agency date Currency Equivalent Capital 1 2 3 4 5 6 7 8 9 10 Total Foreign Currency 100% Deposits Placements

* Use mid-rate at end of reference month

Name: ___________________________ Signature ___________________________ Position: __________________________ Date: __________________________

Cross References The Financial Institutions (Limits on Credit Concentration and Large Exposures) Regulations, 2005, S I No.44 of 2005 The Financial Institutions (Insider Lending Limits) Regulations, 2005, SI No. 45 of 2005

EMMANUEL TUMUSIIME-MUTEBILE, Governor, Bank of Uganda.

Original Laws of Uganda consolidation (as at 12 November 2010) — public-domain legislation, consolidated by ULII / Laws.Africa (CC BY 4.0). This is a point-in-time text and may not reflect later amendments; confirm against the latest Uganda Gazette before relying on it.