HomeNewsBrokers slapped with six-month trade ban

Brokers slapped with six-month trade ban


The Securities Commission of Zimbabwe (SEC) has slapped stockbrokers New Africa and ReNaissance Securities with a six-month ban each after they failed to meet the mandatory capital requirements.

SEC had set a deadline of March 31 2012 for all stockbroking firms to comply.

Stockbrokers are required to have at least $150 000 capital adequacy or 13 weeks’ working capital in order to be licensed.

“The suspension is for six months reckoned from April 2 of 2012 as stipulated in Section 49 (2) of the Act,” said SEC chief executive officer Tafadzwa Chinamo in a statement.

“This action has been necessitated by the two firms failing to comply with basic requirements of the rules and regulations and the Act.

“The requirements include capitalisation, two licensed securities dealers and engagement of a compliance officer.”

Chinamo said the commission would continue to engage the firms during the course of their suspension.

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.

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.

Under the Act the commission may specify the period of the suspension, but it should not exceed six months and it may at any time in a written notice to the licence holder, revoke the suspension.

Sources told NewsDay this week that disagreements among shareholders of New Africa on how to recapitalise the stockbroking firm led to its downfall.

The company’s major shareholders include Ndodana Mguquka, Fred Mtandah and Jethro Sibanda.

“It’s not that they failed to raise the funds required by the commission.

“Going forward we are likely to see a change in the shareholding of the firms,” a sources said.

Brokers receive a fixed brokerage fee of 1% on every transaction they make and the money they generate is determined by the amount of deals they conduct on the Zimbabwe Stock Exchange.

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