New fees for asset management firms on cards

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The Securities and Exchange Commission of Zimbabwe (SECZ) is planning to review the current minimum capital requirements for asset management firms, replacing them with a risk-based capital allocation method following its control of the investment managers.

Acting Business EDITOR

Sources close to the development said the firms will not have a flat figure on core capital under this new capitalisation. The regulatory rules on asset managers are one of the 11 proposed rules being worked out by SECZ following amendments to laws governing the country’s capital markets.

“While the companies will be expected to pay a registration, no flat core capital will be required from them. Instead, the process will be risk-based, meaning that it will depend on the exposure of asset management firms,” a source privy to the development said.

SECZ chief executive officer Tafadzwa Chinamo could not be reached for comment at the time of going to print.

The development comes at a time the Reserve Bank of Zimbabwe has lost grip on asset management firms after it transferred its erstwhile regulatory role to the capital markets regulator.

According to a circular by the registrar of banks Norman Mataruka on Tuesday, the country’s investment managers will, with immediate effect, report to the SECZ.

This follows amendments to the Asset Management Act and the Collective Investment Schemes Act through the enactment of the Securities and Exchange Amendment Act which was gazetted last August. Before the amendments, the capital markets regulator, formerly known as the Securities Commission of Zimbabwe, had limited scope, often pitching the commission on a collision course with players.

Confidential central bank reports seen by this paper, as at September 30, 2013, a total of 14 out of 15 asset management companies complied with the minimum capital thresholds of $500 000.

But, TFS Asset Management, the report showed, was not compliant with the minimum core capital.

During the period under review, Infinity, another asset management firm, was placed under voluntary liquidation following failure by the institution to close a funding gap of $1,02 million.

The firm’s shareholders appointed Tudor House Consultants as the liquidator of the institution.

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