ZSE moves closer to demutualisation


THE Zimbabwe Stock Exchange (ZSE) has tendered for a legal adviser as it steps up efforts to finalise the demutualisation exercise which has been in the cards for years.

Gamma Mudarikiri

In a tender notice recently, ZSE said it was seeking to transform itself into a company limited by shares and at the same time update its member rules and listing requirements to synchronise them with the Securities Act (Chapter 24:25) and Statutory Instrument 100 of 2010.

Demutualisation refers to a process by which a mutual organisation is transformed into a publicly-traded firm. A mutual company is one that is owned by members for their benefit.

According to the notice, the legal adviser would work in co-operation with appointed financial advisors, the ZSE, and other stakeholders as appropriate, to provide legal advice generally regarding the transformation process, prepare the founding documents to corporatise the ZSE, review and align member rules to current legislation and the transformation objective, and review the proprietary rights of current members.

“The explicit objectives of the assignment are legal advice on the best transformation process; incorporation of the ZSE as a corporate body limited by shares; legal advice on the equity entitlement of proprietary rights in the ZSE as currently constituted and in the corporatised ZSE,” read part of the notice.

The demutualisation of ZSE is expected to be completed in January next year.

The process has been on the cards for several years with government saying lack of funding was hindering the process that is expected to increase the value of shares.

By the end of last year, Government was reportedly considering injecting $4 million to facilitate the demutualisation process.

Stockbrokers have largely been uneasy about the developments at the stock exchange, especially the delays in completing the demutualisation process as the slow process of demutualisation has seen the local bourse lagging behind other regional stock exchanges such as the Johannesburg Stock Exchange.

Last month, ZSE boss Alban Chirume said a Mauritian company had been engaged to assist the local bourse on the automated trading system (ATS) process that has been slated for the first quarter of 2014.

The rollout was supposed to have been done by December, but has been pushed to next year due to funding constraints.

The Mauritian company is expected to review business processes of the ZSE which include tailor-making the system running the ATS, Chirume said.

Chirume said the market capitalisation of the ZSE would be close to $6 billion by year end as the economy stabilises in the post-election period.

The setting-up of an ATS came at a time when the exchange in June announced that it was currently recruiting an ATS consultant tasked with improving efficiency of the exchange as well as catch up with regional peers.

The ZSE initially had plans to roll out the project by year end. The bourse has been working on automating since 2010, but this has been stalled due to funding issues.


  1. Let bygones be bygones, but for recording accurate history, it should be noted that, in spite of the fact that stockbrokers will benefit from increased turnover, they put a spirited effort to derail the whole thing…we are yet to ascertain why people, professionals for that matter, will want to cling to shouting prices, when the whole world has embraced ICT!!

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