New Africa Securities and ReNaissance Securities were yesterday suspended from trading at the Zimbabwe Stock Exchange (ZSE) as they are reportedly inadequately capitalised.
Stockbrokers are required to have at least $150 000 capital adequacy or 13 weeks working capital in order to be licensed.
The development comes barely a week after ZSE in consultation with the regulator, the Securities Commission of Zimbabwe (SEC) suspended Interfin Securities and Remo Investments Brokers over a payment dispute.
SEC chief executive officer Tafadzwa Chinamo confirmed the development.
The two were not fully funded. They had not met the licencing requirements and the deadline for compliance was March 31, said Chinamo. We have been communicating with them all along. So if they address that issue we will lift the suspension.
Brokers receive a fixed brokerage fee of 1% on every transaction they make.
The money they generate is determined by deals they make a day on approximately two hours of trade they have.
SEC was established through an Act of Parliament, to among other functions, provide high levels of investor protection, reduce systemic risk, regulate trading and dealing in securities and register, supervise and regulate securities exchanges.
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The commission also licences, supervises and regulates licensed persons to ensure high standards of professionalism and integrity on their part and encourage the development of free, fair and orderly capital and securities markets in Zimbabwe.
Several stockbroking firms have been struggling as a result of an illiquid market with less coming from foreign investors and little from local institutional investors.
Turning to the suspension of Remo and Interfin, Chinamo said: Investigations are still ongoing. Once they are concluded we will sit down and consider what action to take.
