THE Securities Exchange Commission of Zimbabwe (SECZ) will next week hold a board meeting to be briefed on the levels of regulatory compliance by asset management companies and unit trusts.
KUDZAI CHIMHANGWA
This follows concern raised earlier this year by the commission at the lack of presentation of audited financial results from as far back as 2009 by asset management companies and unit trusts. The companies had been given a deadline for compliance and presentation of audited accounts backdated to 2009 by June 30 this year.
SECZ chairperson Willia Bonyongwe said the commission has a team on the ground working to ensure that the companies concerned adhere to regulatory standards.
“There is need to ensure that they conform to regulatory standards, but in certain cases we will be taking remedial action or corrective measures,” she said adding that the commission was working closely with them.
She said that corrective measures basically meant the authority ensuring that which must be done at the appropriate time is adopted.
Bonyongwe said SECZ will be closely monitoring the situation to see what would need to be done about those companies without the capacity to conform to requisite standards.
“We are aware that most of the scrip and money for unit trusts are not held by companies, but with custodians,” she said, adding that all factors would be considered.
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Previously, the regulation of asset management companies was under the purview of the Reserve Bank of Zimbabwe, but is now under SECZ.
This came after amendments to the Asset Management Act and the Collective Investment Schemes Act through the promulgation of the Securities and Exchange Amendment Act which was gazetted last year.
There are 17 asset managers.
The expected meeting comes at a time when the regulators are carrying out an inspection exercise of various asset managers’ books of accounts.
The whole inspection exercise, which commenced in February this year is expected to take between 6 to 7 months as it will cover a broad range of asset management companies thoroughly.
A single inspection takes between 21 to 30 days to complete and the commission will be assessing the companies’ balance sheets, looking at how clients’ assets have been managed; whether the assets are available as well as physically checking them out one by one.
Unit trusts are shared funds that permit private investors to pool their capital in a single fund, thereby distributing their risk across a range of investments while benefiting from professional management, and cheaper dealing costs.
They are an open-ended portfolio of assets such as equities, bonds, cash and listed property in which investors can purchase units.
Pricing changes daily, and are determined by the net asset value of the portfolio’s underlying investments.
