HARARE — The Securities and Exchange Commission of Zimbabwe (SECZ) has deregistered two asset management firms and issued a new directive compelling the registration and full disclosure of nominees after concerns that some companies were allegedly abusing nominee accounts and prejudicing investors.
The capital markets regulator deregistered ZB Asset Management and TFS Management, a unit of Tetrad Financial Holdings, but also registered 15 new firms. It said the new requirements for asset management and custodial firms would improve the level of transparency.
“The nominee shall at all times be required to disclose to regulatory authorities the identity of the person on whose behalf that security is held; the number and class of securities held for each such person with a beneficial interest.
The record shall be prepared in such a way that there is no doubt regarding the ownership of the assets,” said SECZ in the brief to asset managers.
“A nominee shall be a registered company under the Companies Act and wholly owned by a holding company. The nominee shall not have a natural person as a shareholder.
The holding company shall undertake and bind itself to separate clients’ funds from those of the holding company. The funds shall not be available in any circumstances for payment of any of its debt.”
SECZ is concerned that nominee accounts often hide the identity of real owners.
“The custodian shall have a record of beneficial owners of all nominee accounts opened with it and the accounts shall be reconciled on a monthly basis between the Custodian and the Investment Manager. The Custodian shall collect on behalf of nominee accounts of the Investment Management firms, payments, corporate action entitlements, dividends, rentals and interest relating to all assets held on behalf of clients,” said the Securities Commission. — The Source
