Securities Act amended

According to the Securities Amendment Bill of 2012, the changes were meant to address developments that have taken place in financial markets since the Act was enacted in 2004.
“This Bill will amend the Act to increase the commission’s effectiveness, extend its powers to provide further protection for investors, and take account of developments that have occurred in the financial sector since the Act was promulgated in 2004,” says the Bill.
Amendments to the Act will result in changes to four salient features of the legislation to be renamed the Securities and Exchanges Act.
The amendments will see commissioners becoming non-executive, with executive powers vested in the commission’s chief executive officer.
All securities exchanges in the country will also have to be companies rather than mutual associations or other types of corporate bodies.
A single Investor Protection Fund will be established to compensate investors who are prejudiced as a result of malpractice or insolvency on the part of either stockbrokers or dealers.
Amendments to the legislation will expand the nomination committee to include representatives of insurance firms and pension and provident funds, which are major investors in securities. Previously, the Ministry of Finance appointed committee members.
Asset managers and managers of collective investment schemes, currently regulated by the Reserve Bank of Zimbabwe, will now fall under the control of the Securities Commission of Zimbabwe.
In the same vein, collective investment schemes were regulated by the Reserve Bank of Zimbabwe under a separate Act, the Collective Investment Schemes Act. This clause will be amended to align it with the Securities and Exchange Act and bring collective investment schemes under the commission’s control.
Clause seven of the Bill will amend Section 7 of the Securities and Exchanges Act to disqualify directors of public listed companies and of firms which deal in securities from being appointed to the commission as that might give rise to conflict of interest.
Under Section 16 of the Act, newly appointed commissioners will be obliged to disclose all their relevant financial interests before taking up their duties on the commission. This provision shall require them to make the disclosures upon being nominated.
A section will be inserted in the Act to exempt the commission, its members and officers from liability for what they do in the course of their duties. But the exemption will not extend to cover negligence, deliberate wrongdoing or breach of contract.
Under Clause 14 amendment, a new Section 35A will be inserted into the Act, giving the commission power to dissolve the board of a registered securities exchange or to dismiss its members. 
Provisions will also be made in the amended Act                        to increase the fine for misusing inside information                      from a fine of level 10 to a fine of level 14 or five times                   the convicted person’s profits, whichever is the greater.  The maximum prison sentence that can be imposed                  for the offence, which is five years, will remain unchanged.
Anyone aggrieved by a decision of the board of a securities exchange or operator of a central securities depository has a right of appeal to the commission and, if dissatisfied by the commission’s decision, takes their appeal to the Administrative Court.
This clause, in addition to giving the right of appeal                     to the commission against decisions of the chief                                  executive officer, will interpose an appeal to the minister, between the commission and the Administrative                         Court.