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SEC’s investor protection purse grows

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SEC also said the securities regulator’s investor protection fund has grown to $4 million since its establishment last year.
The fund was mooted to protect capital market investors by building a financial bulwark against fraud and other malpractices and offenses by licensed brokers and securities traders.
In the event of such an offense, investors will make claims through an Investor Protection Fund Board established in March this year. But the compensation fund does not cover normal business risk.
“Rules are going to come as to who will access it, when and the like,” Bonyongwe said. “We want companies to be accountable to investors. It doesn’t matter that the investors are minorities; they must be protected.”
The fund is expected to improve Zimbabwe’s score on protecting investors in the next World Bank/IFC Doing Business Report, with a possibility of lifting its overall ranking as well.
Under the system licensed securities traders and dealers licensed to trade in shares collect a levy in every buy or sell deal and remit the money to SEC within a month.
The fund is expected to grow further when the centralised securities depository company, which would be incorporated, this years also starts contributing.
Cordelia Mutangadura, SEC head of legal affairs said the Fund’s board has started working on the structures that would administer the fund.
The board, headed by John Smith, comprises pension funds and trustees.

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