New draft law for Zimbabwe capital markets and listings changes

The Securities Commission of Zimbabwe, which regulates the stock market, has drafted a statutory instrument outlining general rules for stakeholders in the stock market, reports the Zimbabwe Independent newspaper. The draft could end the monopoly of the Zimbabwe Stock Exchange (ZSE), and open the way for new markets to operate. A bond exchange could also be in the planning.
Minister of Finance Tendai Biti in his July mid-term fiscal policy statement announced that the ZSE would be demutualized. This would follow developing revenue to the ZSE and unlocking value to encourage new shareholders.
The Securities Commission has invited industry players to comment on the draft by 24 August. If approved, the proposed rules would require the ZSE to re-apply for a licence with the Commission. The application will include a copy of the applicant’s audited balance sheet and profit and loss account, and the auditor’s report.
The newspaper reports that market capitalization was US$4 billion in mid-August, up from US$1.7 bln in February when trading restarted.
The ZSE is also considering new listing requirements, according to the Herald newspaper, and the Reserve Bank of Zimbabwe has clarified exchange control regulations on dual listings.
The newspaper reports ZSE Chief Executive Officer Emmanuel Munyukwi saying the revision started in August. “It is a long difficult process. It will certainly take us some time so I cannot give you a definite timeframe.”
The ZSE updated its listing requirements in 1998 to harmonize with SADC stock exchanges, based on the listing requirements of the Johannesburg and the London Stock Exchanges. It last revised them in 2006, but there have been some amendments since then. The paper says some players want the ZSE to relax some requirements to enable more companies to list on the local bourse.

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