Transcript Corporate Finance Department - Securities and Exchange

Sec
The Securities Commission
of
Zimbabwe
“The overall mandate of Securities &Exchange
Commissions in Zimbabwe and Globally”
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Introduction
Role of SECZ – Objectives & Functions
Importance of Securities Regulation Globally
Career opportunities In Capital markets
Conclusion
World-wide capital markets play a key role in the
development of the economy, hence its necessary to
regulate these markets.
 Regulation is usually done by Securities and
Exchange Commissions, though the names vary from
one jurisdiction to the other for instance,
 Capital market regulation in Zimbabwe is done by the
Securities Commission of Zimbabwe, In South
Africa, by the Financial Services Board, in America,
by the U.S. Securities & Exchange Commission.
 Though the names differ, they all strive towards one
goal i.e effective regulation of securities market
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The role of the regulator is very important in capital
market given the varied participants and
intermediaries operating in this market
 The regulator has a 3 fold duty to perform:
 Regulatory Role - To ensure that the market
participants behave in an orderly manner
 Developmental Role - To ensure the continuity of
the securities market as a major source of finance for
individuals , corporates and the Government
 Investor Protection Role – To protect the interest of
investors
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SECZ is an independent ,statutory regulatory body of
the Zimbabwean capital market, which was
established through the enactment of the Securities
Act (Chapter 24:25).
 The Act was promulgated in 2004,and was
operationised in 2008 repealing the Zimbabwe Stock
Exchange Act
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Key objectives of SECZ are to:
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Provide high levels of investor protection
Reduce systemic risk
Promote market integrity and investor confidence
Prevent market manipulation, fraud and financial crime
Ensure transparency in capital and securities markets.
Promoting investor education.
Investor Protection
Protection against misleading, manipulative or
fraudulent practices, including insider trading, and the
misuse of client assets
 Full disclosure of information which is material to
investors’ decisions
 Only duly licensed or authorized persons should be
permitted to hold themselves out to the public as market
operators
 Supervision of market participants
 SECZ established an independent Investor Protection
Fund meant to meet the claims of investors against
defaulting members
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Reduction of Systemic Risk
Reduce the risk of failure (through measures
including capital and internal control requirements)
 Respond to market disruptions through facilitation of
stable domestic and global cooperation and
information sharing.( MOU with local financial
regulator- RBZ ,IPEC to facilitate information
sharing)
 Ensure that capital and other prudential requirements
are sufficient to address appropriate risk taking
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Promoting market integrity and investor
confidence
 Confidence in any capital market, is perhaps the single
most important pre-requisite for its sustenance and
growth
 Establishment and enforcement of strong and effective
regulation which ensure fairness and prevent activities
which damage investor confidence.
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Promotion of investor education
Undertaking programmes designed to inform and
sensitise the investing public on the operation of
capital markets (workshops, seminars, expo and
exhibitions, career guidance programmes for school
kids etc)
 Instil basic knowledge about the capital markets,
what is involved, how to participate
 Equipping investors against some of the obvious
risks and pitfalls that go with every investing
opportunity.
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To achieve its objectives ,SECZ is vested with the
following key functions :
 Regulating trading and dealing in securities (e.g.
shares)
 Registering, supervising and regulating securities
exchanges ( Zimbabwe Stock Exchange is the
only exchange at the moment)
 Licensing , supervising and regulating licensed
persons (stockbrokers, custodians, transfer
secretaries, investment advisers)
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SECZ has regulatory jurisdiction over all
intermediaries and persons associated with the
securities market
It can issue directions in relation to securities market
to the market participants
SECZ can specify matters for disclosure in order to
ensure investor protection
It can investigate matters relating to securities and
adjudicate violations
Can call for information from, undertaking
inspection, conducting audits of licensed players
All intermediaries associated with the securities
market are to be licensed by SECZ and are
governed by specific regulations
 SECZ is empowered to take any disciplinary
action against any intermediary violating any
regulation, it has powers to suspend or cancel
registration
In summary, SECZ has been given the necessary
autonomy and authority by the Government to
develop and regulate the securities market.
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The main rules and regulations governing the
securities market are:
 The Securities Act
 SI 100 of 2010 - which lay down the
registration and licensing criteria for market
participants as well as the code of conduct
 SECZ is in the process of framing various
regulations and guidelines in order to govern
the working of the securities market.
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Securities regulation is therefore essential to:
 To instil confidence in markets
 To make markets more credible and efficient
 To bring transparency and openness to
markets
 To curb unscrupulous activities and players
from manipulating markets
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SECZ strives to create transparent, orderly and
efficient capital markets in order to attract
investors
To be attractive to potential investors, a
market must have earned investor confidence,
which in turn is achieved through the
imposition and effective enforcement of rules
which ensure the market is operated efficiently
and effectively.
A well regulated market has the potential to
encourage additional investors to partake, and
contribute in, furthering the development of the
economy
 The existence of a strong regulatory framework is
essential to the creation of credible capital market
which is attractive to both investors seeking a
legitimate place to invest their money, and
 issuers seeking to attract capital to support
legitimate business..
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Various Career opportunities exist in the following
market intermediaries that are licensed by SECZ:
 Securities Exchanges ( e.g. ZSE)
 Securities
Dealing Firms (i.e. Stockbrokers,
authorised dealers, compliance officers, Client liaison
officers, research analysts etc )
 Transfer Secretaries
 Custodians
 Securities Investment Advisors
 Investment management companies
The regulation of capital markets is essential for the
market to play its economic and developmental role
 In order for capital markets to strive , there must be
adequate safeguards which will enhance public
confidence in the market
 SECZ will continue to:
 Develop systems, regulations and codes of conduct
to guide the market.
 Contribute to both the protection of investors as well
as the orderly development of the capital market
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Thank You