In order to address these challenges BOU has undertaken a comprehensive review of the PD regulatory framework in order to enhance the system and to create a more competitive market environment. Effective 1st September 2009, risk based approach to capital for PDS was introduced.
In addition, market making valuations have been reinforced whereby PDS clearly indicate what is available in categories for sale, trading and held until maturity. Let me also mention that Bank of Uganda has now embarked on the second phase of reforms which will involve introduction of non-bank PDS, through a Tiering system as well as underwriting provisions.