The Capital Markets Authority of Uganda (CMA) has cautioned Ugandans against dealing with cross border payments app Chipper Cash to purchase global securities saying they would be doing it on their own risk.
The company, in November 2021 announced that they had launched a product that allows Ugandans to buy fractional stocks in global companies including Facebook, Amazon, Google among others starting from as low as $1.
“For the first time ever, Ugandans of all economic backgrounds will be able to invest as little as $1 or 3,500 Uganda Shillings in the world’s largest public companies listed on the New York Stock Exchange – when we talk about unlocking global opportunities, this what we mean. As a proud Ugandan, it means so much to me that we get to launch a product that will empower my fellow countrymen and women,” Ham Serunjogi, CO-founder and CEO of Chipper Cash said at the launch
But according to the CMA, a statutory body responsible for regulating and promoting the development of capital markets in Uganda, Chipper Cash is not licensed to trade in stocks and is not a member of the Uganda Securities Exchange.
“Only Chipper Technologies Uganda Limited was licensed by the authority as a broker on 26th August 2021. Subsequently, the firm applied for membership of the Uganda Securities Exchange – USE as broker, which application has not yet been granted,” a statement from CMS reads in part.
“Members of the public are cautioned that dealing with Chipper Cash to purchase global securities will be done at their own risk as dealing in global stocks is not regulated by CMA,” the statement further reads.
Chipper Cash has since November 2021 been conducting its business of helping Ugandans purchase global stocks through its partnership with DriveWealth LLC, a pioneer in fractional investing and embedded finance.
Earlier in February, a concerned citizen petitioned the CMA over an alleged brokerage license it issued to Chipper Cash to invest in US stock markets.
The citizen identified as Samuel Obedgiu wondered how Chipper Cash would go ahead to invite Ugandans to invest in its global stocks without issuing a prospectus as required by the law.
He also noted that, among other issues, Chipper Cash had obtained a brokerage license from CMA yet the company has not utilised it and is not involved in any brokerage business at Uganda Securities Exchange.