Nqobile Bhebhe, Zimpapers Business
INCOMPLETE and inaccurate documents submitted by sponsors are delaying listing transactions on the Zimbabwe Stock Exchange (ZSE), prejudicing clients and raising concerns over the quality of professional services supporting the country’s capital markets.
The exchange’s Head of Compliance and Issuer Regulation, Mr Lyndon Nkomo said repeated errors, inadequate disclosures and failure to meet listing requirements were forcing the exchange to send documents back for corrections, resulting in conditional approvals and unnecessary delays.
Speaking during the inaugural Financial Markets Stakeholder Summit in Bulawayo, where he presented on “Bridging the Gap: The Sponsor’s Role in Delivering Successful Transactions on the Exchange”, Mr Nkomo challenged sponsors to exercise greater diligence and uphold their responsibility to companies seeking to raise capital through the bourse.
He said the submission of incomplete documents had become a discouraging trend, forcing listing committees to issue conditional approvals.
“What we have also been witnessing is a very discouraging trend where people bring incomplete documents.
” It is expensive to get the listing committee to sit and consider a document, and these people are non-executive with their own assignments to do,” he said.
“The trend over the last few years has been that, if you look at the decisions of the listing committees, there have been conditional approvals because of incomplete documents.”
Mr Nkomo said sponsors had a duty of care to issuers and their clients to ensure all submissions met the exchange’s requirements.
“That is unacceptable. Sponsors, you owe a duty of care to our clients to ensure that when you submit documents, they are complete and meet the full requirements,” he said.
He warned that inadequate preparation was creating unnecessary back-and-forth between sponsors and the exchange, particularly where prospectuses and other transaction documents contained errors or omitted critical disclosures.
“We have been experiencing repeat submissions between ourselves and sponsors because of errors in prospectuses, errors in previous documents and errors in the documents that we are reviewing,” he said.
Mr Nkomo said sponsors needed to be meticulous in preparing documentation and ensuring that all disclosures required under the listing rules were included.
“Because sponsors are not being meticulous in terms of the preparation of documents, ensuring that they contain all the appropriate disclosures required in terms of the listing rules, transactions are delayed to the prejudice of the issuer,” he said.
“These transactions are usually time-sensitive. But if we keep on issuing comments and you don’t address them, that becomes a problem for the issuer.”
He said only a few sponsors consistently submitted accurate documents with full disclosures and that met the requirements of the relevant circulars.
“So I think there are only probably a few that bring documents that are accurate, documents that contain full disclosures, documents that meet the requirements of the circular,” he said.
He urged sponsors to reflect on the quality of their submissions and undertake thorough checks before forwarding documents to the exchange.
“I think it’s something that we need to reflect on. When you are submitting a document, reflect on whether you have done what is required,” he said.
Mr Nkomo also noted the importance of mentorship and skills development within sponsoring firms, saying senior professionals needed to invest time in training younger practitioners to maintain service standards and protect client relationships.
“This is a very important issue as to whether the principals in various firms are also giving time to train the young ones that are coming up. Because if you do not train them, the output is going down and you may lose clients,” he said.
His remarks show the importance of professional accountability among market intermediaries as Zimbabwe seeks to deepen its capital markets, attract more issuers and strengthen investor confidence.
Sponsors play a critical role in guiding companies through listing requirements and ensuring that information presented to investors is accurate, complete and transparent.
Improving the quality of submissions would help reduce transaction delays, protect issuers’ interests and reinforce confidence in the efficiency and credibility of the exchange.
