ZSE listing rule reforms on cards

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SWEEPING reforms to the Zimbabwe Stock Exchange (ZSE)’s listing requirements are on the cards with a new statutory instrument to regulate the local bourse on the cards, the businessdigest has learnt.

Although ZSE CEO Alban Chirume in a press briefing on Wednesday could only comment on the proposed new capital requirements, insiders say other reforms in respect of corporate governance, reporting cycles, appointment of auditors and disclosures will come with the new regulations.

“There are certain transactions which we had previously said are disclosed when companies report, but now these smaller category four transactions are grouped with category three transactions so to say and will be required to be made as and when they happen,” a stockbroker close to developments at the ZSE said this week.

On corporate governance, the stockbroker said each listed entity will now be required to comply with the country’s National Code on Corporate Governance, adopted by the country early April 2015.

Moreover, companies will also be compulsorily required to make quarterly reports to the public.

“Previously this was not the case and according to the new rules, the company can just choose not necessarily to hold briefings but send the reports on their websites only for the first and third quarters of their annual financial calendar year. For the other two, they will have to hold actual briefings as well,” the stockbroker said.

The insider said the new rules are also seeking to deal with rotation and appointment of auditors. The new rules requirements will compel companies to appoint new auditors every ten years whereas there was no such requirement previously. However, it is understood the same firm can be reappointed at the end of the ten-year tenure provided the signing partner is changed.

Chirume said a final draft of the proposed revised main board listing rules was approved on 17 February by the regulator, the Securities and Exchange Commission of Zimbabwe (SECZ), and now awaits gazzeting in accordance with the Securities and Exchange Act for the rules to become effective.

“The minimum capital threshold for listing will be US$10 million for the main bourse and US$250 000 for SMES (Small to Medium Enterprises),” said Chirume, adding SMEs will be listed under a junior board to be known as the Zimbabwe Emerging Enterprise Market (ZEEM).

Chirume quashed any potential fears companies already struggling to raise capital will be forced to delist, saying implementation of the new rules will be gradual taking into consideration the lengthy process and complexities that come with raising capital.

Giving a general update of operations and implementation of the bourse’s strategic initiatives, Chirume said the automation project is on course and expected to go live on July 3 this year.

He said the application system must be installed by today, adding the automated system will interface with the Central Security Depository run by the Chengetedzai Depositor.

Chirume said a new company — Zimbabwe Stock Exchange Limited — was registered and its issued share capital allocated in accordance with an agreement between government and members of the ZSE. The process gave government 68% control of the company and brokers 32%.

He also announced the bourse has crafted revised Debt Market Rules aimed at enabling the trading debt instruments.

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