Zimbabwe’s central bank has issued an exchange control directive that will pave way for the commencement of trading at the Victoria Falls Stock Exchange (VFEX).
Seed Co International is the only company listed on the VFEX.
But, trading of its shares, which was supposed to commence last week Monday, was delayed due to the absence of the exchange control directive, which has since been issued.
Under the Exchange Control Directive RV177/2020, which was issued by the Reserve Bank of Zimbabwe’s Director Exchange Control, Farai Masendu, the central bank has ordered the creation of an investment FCA for those listed on the VFEX, which is expected to facilitate the administration of foreign currency inflows and outflows under the bourse.
The central bank also ordered that all foreign currency inflows invested into a resident company listed on the VFEX shall be from free funds or offshore funds credited into the listed corporate’s Investment FCA.
The directive also covers custodians facilitating trades on the VFEX that are now allowed to transfer foreign currency pursuant to a trade between buyers’ and sellers’ FCAs.
As per ZSE directive, local retail investors will, however, first have to open custodian accounts if they are to start trading.
In terms of dividends paid out by a VFEX listed company to resident investors, such income shall not be subject to the surrender requirements and may be held for an indefinite period for use to meet local and or external foreign currency payments in line with Exchange Control Provisions.
“Dividends and disinvestment proceeds due to non-resident investors shall be freely remittable through the Authorised Dealer without seeking prior Exchange Control approval,” reads part of the Directive.