The Financial Securities Exchange (FINSEC) renders a convenient and technology driven securities market which caters for the interests of every category of issuer and investor. FINSEC is an agile exchange with listing and trading rules that are designed to accommodate various types of securities and yet retains robust and transparent structures for risk containment. Companies can list on the exchange through either an Initial Public Offering (IPO), listing by introduction (LBI) or listing by private placement.
FINSEC has introduced an intervention dubbed the GEM Portal that enables SMEs and High Growth Enterprises to access more diverse funding options such as debt (long and short term), listing on FINSEC, opportunities for pre – IPO funding, IPO pathfinder and restricted offers. Prospective companies complete an online application for raising capital through either equity listing on the FINSEC Exchange or through debt financing by investors. The interactive online form has an in-built comprehensive scoring and rating mechanism of each input by the applicant, indicating to the applicant how well they are doing and the prospects of their application. Applications that meet the predefined minimum score will be exposed to various providers of capital.
Moreso, companies can List by Introduction on FINSEC. Listing by Introduction (LBI) allows a company to apply for listing without the conduct of an initial public offering (IPO) prior to the initial listing of the company’s securities on FINSEC. It applies to an application for listing of securities that are already issued or securities that will be issued upon listing, where no public offering will be undertaken.
When a company chooses to list by introduction, a pre-listing statement shall be published. This pre-listing statement is not an invitation to potential investors to subscribe for shares in the company, but is issued for the purposes of providing information to the public about the company. Investors will be able to buy shares in the secondary market trading of the company after the listing.
Listing by introduction on FINSEC helps to facilitate price discovery and market-value realisation, for Over-the-Counter traded and similar securities. Through market demand and supply forces together with an efficient information processing mechanism, buyers and sellers of securities listed on FINSEC are assured of transacting at fair prices.
Another method of listing is by an Initial Public Offering which can be defined as the first sale of stock by a private company to the public. It is generally offered by new firms that are looking for funds to grow and expand their businesses. Through this process, commonly known as floating, or going public, a privately held company is transformed into a public company. Initial public offerings can be used to raise new equity capital for the company concerned or to monetise the investments of private shareholders such as company founders or private equity investors.
When a company initiates the IPO process, a very specific set of events leading to the listing occurs. These events are usually undertaken through the guidance of the company’s nominated advisors who will coordinate meetings involving the various parties to the listing transaction. Other parties involved may include the sponsoring broker, transfer secretary, independent financial advisor and legal advisor.
Information regarding the company is compiled, including financial performance and expected future operations. This becomes part of the company prospectus, which is circulated for review. The company files its prospectus with the relevant authorities including the exchange on which it intends to list and sets a timetable from when the offer opens to when it closes and the company lists. On receipt of the prospectus, investors are encouraged to go through the document in detail as it contains information about the company’s historical as well as future prospects. Where possible, potential investors should contact their financial advisors for expert advice.
In some instances, though not very common in our markets, a company offers its shares through a process known as private placement. This process involves the issue of shares, bonds or other securities to a few identified investors without opening up the offer to the general public as is the case during an IPO. While secondary trading of such securities may be open to the public, the initial stockholders transact privately to determine the initial pricing and percentage holding among themselves.
FINSEC listing rules are, by design, simple and straightforward and are continually reviewed and updated to ensure they remain relevant and appropriate to the various classes of securities that can list and trade on our trading boards. To enjoy all these and other benefits, kindly visit the FINSEC website and download the FINSEC Issuer Admission Rules or contact us.
The Financial Securities Exchange (FINSEC) is a Zimbabwe registered securities exchange and a member of the Escrow Group. The Escrow Group has interests in the financial services and technology sectors. Corpserve Registrars and Escrow Systems are the other members of the group.
For more information contact:
2nd Floor ZB centre, Cnr Kwame Nkrumah and 1st Street
Tel: +263 242 758193
Email: info@finsec .co.zw