SecZim amends Securities Act

HARARE - The Securities and Exchange Commission of Zimbabwe (SecZim) is seeking admission into the International Commission of Securities Commissions (IOSCO) an executive has said.

SecZim chief executive officer Tafadzwa Chinamo told a stakeholder meeting that over the years, the commission had been seeking admission to the IOSCO  — which brings together the world’s securities regulators and is recognised as the global standard setter for the securities sector — without success due to its failure to meet some requirements.

Some of the requirements include amendment to the Securities and Exchange Act, which will help improve investor protection.

“So over the years the Commission has been working on getting us all into this arena. Like any cool place you don’t just walk in, there is an admission process,” Chinamo said.

“There is an admission process. To get in, there is some paperwork involved. But at the core of these amendments is improving investor protection mechanisms,” he told stakeholders.

He said admission of SecZim into this global body of the securities regulators would enable market players such as central securities depositories, asset managers, brokers, issuers and advisors to mingle openly with the rest of the world.

Chinamo said Belgium, a member of IOSCO, has been assigned to look at SecZim’s application. The process would ultimately require Parliament to pass the amendments.

“So while the regulator, SecZim, and the government, ministry of Finance and the Attorney General (AG), are happy with the proposed amendments, input from the market is required.

The SecZim chief executive said investor protection may appear overhyped “but once you analyse capital markets for what they really are, you will appreciate why regulators spend so much time on the subject”.

He said investors wanted to know the performance of their investments and needed information.

“The gap so created between the company and its shareholders is so great that left to themselves, investors would be at the mercy of the company managers and capital wouldn’t flow to business.

“Capital markets exist to close the gap by creating a means for information to move from the company to investors and money from investors to the company,” he said.

Meanwhile, amendments to the Securities and Exchange Act will enhance the country’s capital markets, which have been on the edge of the international capital markets arena.

“Zimbabwe is lagging behind regional and global economies and amending the Act would open new opportunities for growth,” he said.

The amendments will also provide for regulation of issuers of security, which has been one of its major challenges.

In addition to that, they will also align local practices and norms to international best practice

“No securities shall be issued, offered, transferred or sold to the public or otherwise listed on an exchange without prior registration with the Commission,” Chinamo said.

Among other benefits, the amendments will bring enhanced record keeping as well as disclosure by listed companies.

Zimbabwe Stock Exchange (ZSE) acting chief executive Martin Matanda, said the proposed amendments were a welcome development in promoting ease of doing business, attraction of investors as well as enhancing investor protection, which is crucial in any market.

Association of Stockbrokers chairperson Bart Mswaka, said any changes that would align Zimbabwe with international best practice were a welcome development.


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