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Oliver Kazunga, Senior Business Reporter
THE Securities and Exchange Commission of Zimbabwe (Secz) plans to introduce stiffer penalties on listed companies who flout regulations once the proposed Securities and Exchange Act amendments are approved.
Secz is finalising amendments to the Securities and Exchange Act to enhance the country’s capital markets, unlock value as well as enhance investor protection.
At the moment, the existing Act does not have provisions that empower the regulator to have an oversight role on listed firms, and this by international standards reflects an anomaly.
In an interview after a stakeholder engagement hosted by the commission in Bulawayo yesterday, Secz chief executive officer Mr Tafadzwa Chinamo said:
“Currently, we are regulating intermediaries or people that link companies and investors so these are investment advisors, asset managers, brokers and so forth and we really don’t have severe penalties but the penalties that we are introducing are that all those people are required by law to give us information at certain times.
“For example, if a company is listed and is supposed to publish its financial results for the 12 months in a national press, they get three months to do that and if they don’t, within three months we then start penalising them severely”.
Of late, some listed firms have been accused of withholding relevant information for investors especially from analysts. Mr Chinamo said the exact quantities and quantum of the penalties will be made known in due course after consultative engagements with stakeholders in the market. The proposed amendments are expected to be presented to Parliament in the next few months.
“The amendments seek to address us not regulating these listed companies. So, what we are putting in these amendments, is giving the power to the commission to be able to have oversight of companies that come to the market and sell their shares to the public in return for the capital,” he said.
Mr Chinamo said at present there was a list of information that listed firms were not disclosing for investors to make decisions.
“For example, when you buy shares into a company you become a shareholder, now a typical listed company will have tens and thousands of shareholders and there is certain information that as a shareholder I need to know in order to assess the value of my investment.
“That information can only come from a company through financial statements. Right now, they will show you something (financial results) in the paper and it might be missing a lot of things but there is nothing in terms of law to force that person that the law requires you to also give this information.
“The information is there but we are saying let it come in a much more complete set and the completeness of it, let us refine it so that there is no ambiguity,” said the Secz boss.
Meanwhile, Mr Chinamo told participants at the forum that the commission was seeking admission into the International Commission of Securities Commissions (Iosco), which brings together global securities regulators. — @okazunga.
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