eBusiness Weekly
HARARE – The Securities and Exchange Commission of Zimbabwe (SECZ) is in the process of amending laws governing the sector to fine tune them to be in line with global best practice to enable the country to join the acclaimed International Organisation of Securities Commissions (IOSCO), an official said on Tuesday.
Established in 1983, IOSCO regulates about 95 percent of the world’s securities markets in more than 115 jurisdictions, but Zimbabwe is yet to gain membership due to deficiencies within its securities laws.
SECZ chief executive Tafadzwa Chinamo told the first consultative meeting on proposed amendments to the Securities Act, that the organisation has had at least two applications to join the world securities body turned down and had therefore embarked on a journey to seek stakeholder opinion before the law was amended.
“For so many years we have stood on the edge of the international capital arena. Over the years the Commission has been working to get us into this arena, so that we mingle openly with the rest of the financial world. For any jurisdiction, no other body gives a better thumbs up to a market than IOSCO,” he said.
“We made an application, they wrote back to us and pointed out that our laws are deficient in a number of areas and needed amendment before we could be considered to be at the same level with the rest of the world members.”
He said the proposed changes would make Zimbabwe an attractive market to international capital.
“At the core of these amendments is improving investor protection mechanisms,” he said.
“A good system makes it easy for investors to feel free to part with their money.”
As part of the changes, SECZ says it wants to have direct over-sight on listed companies, a proposal that was shot down by some who argued it sought to usurp the powers of the Zimbabwe Stock Exchange (ZSE).
“It appears there is a power struggle between the ZSE and SECZ,” said lawyer, Tawanda Nyambirai, who proposed that it would be better to strengthen the ZSE than to give too much power to the regulator.
SECZ has also proposed that it be given powers to license and approve credit rating agencies, providers of administrative services as well as audit firms.
It also wants to come up with penalties for companies that fail to provide and or publish required documentation on time and will also require that companies maintain financial records for a period of up to 10 years up from the current seven years.
A representative of Old Mutual, who is also the managing director for Cabs, Simon Hammond welcomed some of the proposals to tighten the securities market regulation but warned against giving too much power to SECZ which would make it the “prosecutor and judge” in the sector.
Chinamo said contributions from stakeholders were still welcome up until the amendments, which still have to go through the Attorney General’s Office and then Parliament are finalised. – New Ziana
