The Securities Commission of Zimbabwe (SEC) has failed to meet its September deadline for automation of the Zimbabwe Stock Exchange (ZSE) due to delays in the appointment of the commission’s board and the setting up the shareholding of the system.
SEC chairperson Willia Bonyongwe said the current manual systems were not transparent, unfair and could be manipulated, but investors want to monitor trade and be treated fairly.
“We are now targeting a new deadline which will be revealed soon after our meeting with the ZSE board. It is very critical that we automate because serious foreign investors would not touch us with a barge pole with the way we trade,” Bonyongwe said.
“Right now, if two people have the same amount of money to buy into a stock there is no assurance that they will be treated impartially. Deals are being done which exclude other people and they are not disclosed and the regulators have no way of monitoring them. So a new deadline will be provided together with the consequences of not adhering to it.”
ZSE chief executive officer Emmanuel Munyukwi said the local bourse was waiting for the Finance ministry to finalise the issue of shareholding structure.
“We are looking forward to feedback from the ministry as they have sent the papers to Cabinet, ” Munyukwi said.
He said the shareholding was going to include government institutions.
In September, Finance minister Tendai Biti said the National Social Security Authority, the Reserve Bank of Zimbabwe and the ZSE would own at least 51% of the automation company.
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The stock exchange is currently using share certificate and brokers are trading manually.
For the automation to start the central depository system should be working resulting in all share certificates being in electronic form.
The central depository system is an electronic book entry system that holds and administers securities and enables transactions to be processed electronically.
The automation system will replace the current manual system where brokers place orders on bids on a board during trading sessions on the floor for allotment to be done.
Bonyongwe said the relationship between the commission and the stock exchange had improved although there was need to have a structure to run an exchange.
“How do you run an exchange without a lawyer, without a corporate finance person without an accountant?
“ How do you go through the submissions which come your way?
“We also need people and systems of surveillance. The exchange is our first line of enforcement and surveillance and if it is weak, no matter how good the regulator is it won’t be effective,” she said.
