Chengetedzai Depository Company is mulling introducing turnaround trading to attract the interest of a different profile of investors.
BY BUSINESS REPORTER
Chengetedzai chief executive officer Campbell Musiwa said the central securities depository (CSD) was currently seized with the project billed to make the market more efficient.
“This will also attract the interest of a different profile of investors such as day traders seeking to take advantage of any short-term market fluctuations,” he said.
The CSD has shortened the settlement cycle to T+3 (transaction plus 3 days) from the T+7 which existed before May 2017.
Musiwa said the market should seek to improve further and operate on shorter settlement cycles such as T+2 (transaction plus 2 days).
He said the CSD has received inquiries on securities lending and borrowing and his organisation would soon “commence stakeholder consultations on securities lending and borrowing with a view to ensure that market needs are met”.
“Securities lending and borrowing are also key to managing the risks around turnaround trading,” Musiwa said.
He said the introduction of the CSD has allowed the pledging of securities to be done under a secure platform which would enable lenders and borrowers to use securities as collateral while managing potential risks that could arise from such transactions. This, Musiwa said, helps to improve market liquidity and deepens the transactions and activities of the capital market.
He said the CSD has taken into consideration the needs of small time investors and institutions with special needs, thereby aiding financial inclusion.
“The broker-administered accounts model and CSD Business Partnership Framework products targeting the retail investors and self-administered pension funds respectively have been introduced with financial inclusion in mind,” Musiwa said.