The law and practice relating to collective investment schemes: focus on the Umoja unit trust scheme in Tanzania

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University of Dar es Salaam
Collective Investment Schemes (hereinafter “CISs” or mutual funds) pool together investors’ funds and buy financial assets for professional portfolio creation and management. To achieve improvement in the economies of investors and the nation through CISs, there should be an effective, competition under a friendly regulatory regime. It is submitted that such a regime ensures protection of investors and sustainability of the industry. The regime under the Capital Markets and Securities Act (“the CMS Act”) and other related laws does not measure up to these standards. The laws do not property address pertinent issues like conflict of interests, continuous assessment of eligibility, capacity and accountability of operation and of the regulator. It is further submitted that investor ignorance is one of the most serious setbacks for the industry. Otherwise, investor awareness helps in evaluating investment strategies and plans for CISs and systematically reduces ensuring risks. It is equally contended that the financial sector in Tanzania is not yet conducive to the genesis and growth of CISs despite reforms made in the sector. It is a supposition that the sector’s services are limited. The study underscores the relevance of and limitations in the performance of the Umoja Fund and CISs in general. Basing on its encouraging performance during the initial Public Offering (hereinafter “IPO”), the Fund is portrayed as a household name for CISs. Nevertheless, it is submitted that the disputed legal regime and financial sector are an impediment to an optimal, effective and efficient performance of the Fund and the industry. The study makes recommendations towards addressing the overall improvement of the regulatory regime, investor education, and the financial sector.
Available in print form, East Africana Collection, Dr. Wilbert Chagula Library, Class mark (THS EAF HG4530.T34B37)
Investments, Law and legislation, Tanzania
Bartholomew, L. (2006) The law and practice relating to collective investment schemes: focus on the Umoja unit trust scheme in Tanzania, Master dissertation, University of Dar es Salaam. Dar es Salaam.