VFEX trading starts October 26

NDAMU SANDU

Trading on the Victoria Falls Stock Exchange (VFEX) is starting on October 26 after the capital markets regulator Securities Exchange Commission of Zimbabwe gave the new bourse the nod to launch.

VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE) and was established to kick start the Offshore Financial Services Centre earmarked for the special economic zone in Victoria Falls.

It will accommodate three dual listed counters—Old Mutual, PPC and Old Mutual Zimbabwe—that were forced to exit ZSE when it reopened in August after a one-month closure to facilitate investigations into illicit deals blamed for the routing of the local unit against major currencies.

It was recommended that dual-listed counters should trade on a foreign currency-only bourse.

In a statement Monday, ZSE chief executive officer Justin Bgoni said the bourse would be launched by Finance and Economic Development minister Mthuli Ncube on Friday.

“Trading, Depository services, clearing and settlement on VFEX will commence on Monday 26 October 2020. VFEX will be issuing further details on these,” Bgoni said.

The granting of the nod to begin trading comes two weeks after VFEX signed a memorandum of understanding with the central bank in which the banking sector regulator will provide assistance to the settlement services for trades conducted in foreign currency.

The completion of the modalities on the clearing and settlement of transactions with RBZ was one of the final steps towards the launch of VFEX.

Business Times reported last week that foreign investors were exiting ZSE due to unsettling policies such as the suspension of fungibility with critics warning that VFEX would not fly in the absence of proper clearing and settlement architecture.

The warning comes after foreign investors have in the past struggled to take their money out of Zimbabwe following the disposal of stocks on ZSE.

Meanwhile ZSE has licensed 17 securities dealers, 13 sponsors, 5 securities custodians, 3 securities transfer secretaries and 7 non-member institutions for VFEX.

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