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ZSE automation expected in 2013

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The automation of the Zimbabwe Stock Exchange (ZSE) could be completed during the first quarter of 2013, the country’s capital markets regulator has said.

Securities Commission of Zimbabwe (SECZ) chairperson Willia Bonyongwe said the National Social Security Authority, Infrastructure Development Bank, ZB Holdings and the ZSE had formally agreed to run the central securities depository (CSD) after the Ministry of Finance said government entities should own 51% of the system.

Bonyongwe said stakeholders were assessing progress that was made by Chengetedzai Depository Company, a local firm which won the tender to run the country’s first CSD.

A CSD is an organisation holding securities either in certificated or uncertificated (dematerialised) form to enable book entry transfer of securities.

“The ZSE board is seized with the issue. It is a national disgrace that we are not automated as a country,” Bonyongwe said in an interview this week.

“We are losing a lot of foreign investors because of this. The zeal is there, but the pace is very slow.

“We hope the exchange’s automated trading system, central securities depository and market surveillance systems will be operational by the first quarter of 2013.”

Bonyongwe said a transparent and fair stock market was critical in attracting investors into the country.

“Why is it that we are having investments in other sectors of the economy and not the stock market?” she asked.

Bonyongwe added that in other countries investments were mainly at the stock market.
The SECZ boss said the use of information technology on the capital markets would reduce systemic risk, promote market integrity and investor confidence.

Early this year, Bonyongwe told NewsDay Business that the commission failed to meet its September 2011 deadline to automate the stock exchange due to delays in the appointment of the commission’s board and the setting up of the shareholding of the system.

She said manual systems that were being used at the stock market were not transparent, not fair and could be manipulated as people were not able to monitor trades.

Currently, clearance and settlement is done between stockbrokers with payment against delivery of physical scrip on a T+7 calendar day basis.

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