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Nelson Gahadza

Senior Business Reporter

The Securities and Exchange Commission of Zimbabwe (SecZim) has developed draft self-listing rules for exchanges, which among them see the commission becoming a listing authority and assume functions of a registered securities exchange.

According to the draft statutory instrument, the Government through the Finance and Economic Development Ministry has since approved the self-listing rules.

Currently, in Zimbabwe there are three exchanges namely the Zimbabwe Stock Exchange (ZSE), Victoria Falls Stock Exchange (VFEX) and the Financial Securities Exchange (Private) Limited (FINSEC).

The ZSE has over the years held plans to list itself on the same exchange. ZSE chief executive, Mr Justin Bgoni said there was need for legislation for that to happen.

“We have plans to list ZSE itself, so we need a legislation to allow that to happen, so basically that is the legislation that will allow it to happen,” he said.

He said the ZSE or any other exchange cannot self-regulate hence the legislation is an important step towards the listing of ZSE.

According to the draft legislation, an application for approval to admit securities issued by a registered securities exchange for listing on its official list shall be made to the commission accompanied by the appropriate fee as prescribed.

SecZim said a securities exchange that is granted approval to admit its securities on its official list shall be subject to terms and conditions as the commission may determine for the purpose of avoiding conflicts of interest.

“For the purposes of the rules, and in terms of section 63(2a) of the Act, the commission shall be the listing authority and shall assume the functions of a registered securities exchange namely to supervise compliance by an exchange as provided in terms of section 65 of the Act.

“The rules of the particular exchange approved in terms of section 65(3) of the Act, any amendments made thereto and any other rules made in terms of section 118 of the Act in relation to a securities exchange, shall, with necessary modifications, apply to and be read as part of these rules, except to the extent specified in these rules,” read part of the draft SI.

The rules stipulate that any fees, charges, levies and penalties prescribed in the rules of the exchange shall apply to the commission as the listing authority.

The commission may delegate or assign any function referred to in these conditions to any person or group of persons subject to the conditions that the Commission may determine.

On duties, the board of directors of an exchange must, in relation to the inclusion of securities issued by the exchange in its own list implement appropriate arrangements to ensure that no real or potential conflict of interest arises with respect to such inclusion.

In addition, the board should also consider all complaints by affected persons relating to a conflict of interest and determine whether a conflict of interest has arisen or may arise.

They should also report all complaints received in connection with a conflict of interest to the Commission as soon as reasonably possible after the receipt of the complaint.

“The report by the exchange must include all material facts, together with proposals for the resolution of any conflict of interest.”

In terms of reporting, the exchange must include in its annual report to the commission a section on the regulatory and supervisory structure applicable to, and the role of the commission in supervising, the exchange’s own listing.

The section must include a statement to the effect that in the opinion of the Board of Directors, the exchange has complied with all its rules, listing requirements and procedures in a manner which warrants the continued listing of the exchange’s securities on the exchange.

In addition to that, a confirmation that all complaints relating to a conflict of interest were referred to the commission during the year under review.

SecZim is now inviting comments and representations to the proposed Securities and Exchange (Self-Listings) Rules for Exchanges and the comments can be submitted to the commission by 6 April, 2023.