Vusumuzi DubeNelson Gahadza
The Government has gazetted the Victoria Fall Stock Exchange (VFEX) commodities exchange rules, a development that will pave the way for the introduction of a minerals commodities exchange later this year.
VFEX’s main focus has been on expanding the range of securities that are listed on the bourse to enhance services and provide more diversity to investors.
The rules made by the Securities and Exchange Commission of Zimbabwe (SecZim) were gazetted by Minister of Finance, Economic Development, and Investment Promotion Professor Mthuli Ncube through statutory instrument 148 of 2024 in terms of Section 118(6) of the Securities and Exchange Act [Chapter 24:25].
According to the SI, the commodities exchange will be governed by guidelines that include licensing for all commodities trading participants and activities.
To obtain a license for commodity trading, applicants must meet specific criteria, including being registered and ensuring that the principal officer has at least one year of experience in trading such assets, as stipulated by the new regulations.
In terms of the licensing and fees, a commodity dealing company’s application and annual fees shall be US$1 000 each, while a general commodity dealing company will pay US$12 00 for annual fees and US$1 200 for license application.
A market maker will pay US$1 200 for an application and the same amount for annual fees, while a clearing house has the highest application fee of US$2 000 and annual fees of US$5 500.
A warehouse operator will pay US$1 000 for license applications and US$1 200 per annum. Individual commodity dealer, individual general commodity dealer, and warehouse person will pay UD$500 for license application, each same as their annual fees.
A warehouse has an application fee of US$350.
According to the SI, the Exchange shall be the collecting agent of the fees and shall remit 50 percent of the fee to the Commission within ten days from the date of collection.
According to SecZim through SI 149 of 2024, the Exchange has authority to register, review, suspend, or terminate contracts and specify from time to time the minimum contract specifications that an applicant must comply with before each contract is signed or registered. The Exchange also has powers to suspend, alter, or rescind a contract entered into between the Exchange and the trader where there is just cause for such suspension, alteration, or rescission and also specify the circumstances under which a signed contract may be suspended or terminated, as well as impose fines and penalties.
VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE), and a number of ZSE-listed companies have since migrated to the US dollar-denominated bourse, seeking the various incentives the bourse offers and the ability to raise capital in forex.
Online Reporter