ZSE set for overhaul

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The Zimbabwe Stock Exchange (ZSE) has finally applied for an operating licence from the Securities Commission of Zimbabwe (SEC).

The application was submitted amid reports the ZSE had embarked on a raft of reforms to transform it into a modern bourse.

Last year, SEC summoned members to the exchange raising concerns on viability and non-issuance of an operating licence to the ZSE.

Section 30 (2a) of the Securities Act makes it mandatory for the ZSE to register with SEC for it to be considered a bourse.

The ZSE is currently operating as a mutual society run by stockbrokers.

SEC chief executive officer Tafadzwa Chinamo said the commission became operational after the stock exchange was already in existence hence the need for the ZSE to be properly registered.

He said SEC did not have records of the bourse.
ZSE has applied for a formal licence to operate as an exchange, Chinamo said.

They submitted the papers first week of February.
We are going through the application now and we hope by the end of this week we would have completed the process.

He said the process could take time as some of the requirements might be missing from the applications and the exchange might be told to resubmit its application.

We believe the current structures need to be improved. They are not adequate in terms of running an exchange, he said.

We actually did not know the structure for ZSE, but we had for all brokers in the country. The brokers had fulfilled all our requirements as SEC.

In January this year, SEC chairperson Willia Bonyongwe said the ZSE should automate to increase levels of transparency as opposed to the current manual system of trading that could easily be manipulated.

Last week, SEC said it instituted investigations into unusual price movements of some stocks on ZSE.
It said it had noted a disturbing trend over the past years, where unusual price movements were exprienced at the end of a quarter and also at the end of the year.

The price movements are apparently not supported by any fundamentals.

SEC failed to meet its September 2011 deadline for automation of the ZSE.