SECZ finalises capital market rules review

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PHILLIMON MHLANGA

Zimbabwe’s capital markets regulator, the Securities and Exchange Commission (SECZ), is finalising amendments to its regulations to enhance investor protection, it has been learnt.

The new rules and interpretations will boost investor protection by applying consistent principles to investing advisers and brokers or dealers, providing clear disclosures, exercise due care and will also address conflicts of interest.

SECZ chief executive officer, Tafadzwa Chinamo, told Business Times that apart from protecting investors, the proposed legal framework will enhance the quality and transparency of investor relationships with investment advisors and brokers or dealers.

Chinamo said the securities regulation framework was being revamped as part of efforts to have a competitive and more attractive capital market in Zimbabwe.

The proposed new rules are expected to be submitted to Parliament in two months’ time for debate, according to Chinamo.

He said the Securities rules currently in use are in conflict with the International Organisation for Securities Commissions (IOSCO) requirements.

In fact, it has serious deficiencies, which has rendered the laws not compliant with international best practice.

Chinamo, last week told this newspaper that SECZ now wants to align its regulations with IOSCO requirements.

The review would make the rules more specific, detailed and ensure that they dovetail into other rules such as the IOSCO rules.

SECZ has in the past six years struggled to become a member of IOSCO, an association of organisations that regulate the world’s securities and future markets because of deficiencies in its Securities Act. IOSCO members are typically primary securities regulators in a national jurisdiction.

SECZ early this year submitted its draft of amendments to IOSCO for their consideration. And they have now responded.

“We have serious problems with our securities law, which is not in line with the best international practices,” Chinamo said.

“Just for an example, in the event of a breach, the current law doesn’t allow us to deal with companies that are not registered with us, which is a serious deficiency.

“Our rules have also not aligned with the requirements of IOSCO, which is a major problem for us.

“For the past six years, we have been trying to become a member of IOSCO. But, our efforts have been futile due to deficiencies in the current legislation that has rendered the laws not compliant with the international best practice. We made amendments to the Securities Act and sent them to IOSCO and we have now received their feedback. Now, we are finalising the amendments, which we intend to take to Parliament by January 2019.”

SECZ is a member of the Committee of Insurance, Securities and non-banking Financial Authorities (CISNA), a subcommittee of SADC aimed at harmonisation of non-banking sector laws within the region.

CISNA has since directed its members, Zimbabwe included, to attain IOSCO membership, a move which will allow members in the region to collectively and meaningfully promote the national and regional capital markets agenda.

The move will ensure that member States, will contribute towards the development of future regulatory standards at a global scale.