The Securities Exchange Commission (SECZ) will introduce online trading and reporting of all securities across the entire capital markets, as it moves to promote financial inclusion and ease of doing business.
BY NDAMU SANDU
SECZ chief executive officer, Tafadzwa Chinamo said yesterday the push for online trading and reporting of all securities and investments across the capital markets would also enhance the participation of the public.
“The initiative is meant to promote financial inclusion, ease of doing business and securities market development and participation by the public on the local capital market,” Chinamo said at the rebranding of Old Mutual Custodial Services to Cabs Custodial Services.
He said SECZ believes the custodians would play a major role in the education and awareness programme to be instituted by the commission beginning this month for an initial period of six months and then on an annual basis.
“The commission believes this development will allow investors to trade and can benefit from stock market bull runs as well as receive reports on the investments timeously,” Chinamo said.
Custodian duties include, among others, safekeeping of clients, assets, settlement of securities held on behalf of clients, distribution of dividends, interest or any such accruals of income received or collected on behalf of clients on the securities held in custody and accounting for the movement of securities in and out of the custody account.
There are four licensed custodians, with Cabs Custodial Services having more than half of the market share. As at December 31, 2016, assets under custodians were $2,6 billion representing 60% of assets traded on the Zimbabwe Stock Exchange.
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Cabs managing director, Simon Hammond said assets under the wings of its custodian unit rose to $1,445 billion by the end of May from $740 million in 2010.
Hammond said the rebranding of the custodian service was necessitated by the need to meet international best practice that encourages custodians to operate within a banking institution and also to take advantage of the efficient systems within the banks.
Before the change, the custodial services were under the Old Mutual group, Cabs parent company.
The custodial unit had been born out of a de-merger within the Old Mutual’s asset management company. The de-merger, Hammond said, was in recognition and acceptance of industry “best practice”, whereby an asset management company could not perform the dual role of fund management and custodianship.
As the capital markets regulator, SECZ is on a charm offensive to lure more investors into the markets. This comes amid the dwindling number of active accounts to 7 000 from a peak of 200 000. This has seen potential investors missing on the bull run that has been experienced on the stock market.
