Online Reporter
Nelson Gahadza
SECURITIES listed on the Victoria Falls Stock Exchange (VFEX) will undergo a 24-month transition period to comply with new offshore financial regulations introduced through Statutory Instruments 62 and 63 of 2026.
This marks a significant shift in the exchange’s regulatory environment and its positioning as an international financial platform.
Speaking during a webinar on the First Mutual Wealth Gold Exchange-Traded Fund (ETF), VFEX development specialist Ms Sandra Munyoro said the transition reflects a wider restructuring that brings the exchange under the ambit of the Victoria Falls International Financial Services Centre (IFSC), a framework established to support offshore financial services.
“There are new regulations that have just recently come out in 2026. The regulation essentially governs the Victoria Falls Stock Exchange as part of the Victoria Falls International Financial Services Centre,” Ms Munyoro said.
She explained that the VFEX had previously operated under the supervision of the Securities and Exchange Commission of Zimbabwe (SECZ), but its designation as part of an offshore financial centre under Statutory Instrument 29 of 2025 necessitated a shift in oversight and regulatory approach.
This transition, she said, is intended to reposition the VFEX within a more internationally recognisable financial ecosystem, with rules and structures tailored to facilitate cross-border investment and capital mobility.
Ms Munyoro said the establishment of the IFSC, located within a special economic zone, is specifically designed to streamline regulatory processes, reduce friction in capital movements and create a more investor-friendly environment.
“The whole thrust of these regulations that have just recently come out is to ensure that investing and the movement of funds within the International Financial Services Centre is as seamless as possible,” she said.
At the core of the regulatory overhaul are Statutory Instruments 62 and 63, which directly affect VFEX-listed instruments, including exchange-traded funds.
Ms Munyoro said SI 63 provides a formal definition of collective investment schemes, aligning them with trust structures, while SI 62 outlines the operational and governance framework for ETFs.
“In terms of how these statutory instruments are going to affect First Mutual Wealth, SI 63 defines what a collective investment scheme is, and it is in line with what First Mutual Wealth has already implemented,” she said.
“SI 62 also defines what an exchange-traded fund is and how that fund is supposed to be managed.”
Importantly, she said SI 63 introduces a transition window of up to 24 months for all existing VFEX-listed securities to align with the requirements of the offshore financial centre framework. She added that this grace period is expected to give issuers, fund managers and other market participants adequate time to adjust their structures, governance frameworks and operational processes without disrupting market activity.
“SI 63 of 2026 also provides for the transition period for everything that has been listed on the Victoria Falls Stock Exchange. It has been given up to 24 months to transition in terms of aligning with everything that has to do with the Offshore Financial Services Centre,” Ms Munyoro said.
She noted that the First Mutual Wealth Gold ETF is already largely compliant with the new regulatory framework, as it is structured as a trust and adheres to the ETF model outlined under the statutory instruments.
As a result, the product is not expected to face material regulatory hurdles arising from the changes.
“So, at the moment, we are not anticipating anything that can stop the First Mutual Wealth Gold ETF this year. Everything is on course,” she said. First Mutual Wealth Management fund manager Mr Simbarashe Mangwendeza said the Gold ETF has been designed to provide Zimbabwean investors with simplified access to international gold markets, particularly in an environment characterised by policy uncertainty and market volatility.
He said the product responds to a longstanding demand for stable, long-term investment instruments that can preserve value while reducing exposure to domestic economic risks.
“We do have a very fluid policy environment, so we are looking for something that can give investors the opportunity to invest in gold without necessarily carrying some of the risks associated with the Zimbabwean environment, both in terms of risk and the returns profile that we have seen in the markets,” Mr Mangwendeza said.
He added that the ETF offers a straightforward and accessible entry point for retail investors seeking exposure to global commodity markets, particularly for gold, which has traditionally been viewed as a safe-haven asset.
“Essentially, it is going to be an easy way for retail investors to participate in international markets and to gain exposure to movements in the gold price,” he said.
“Our expectation is that we are going to create a savings product for retail investors that can last into the long term and not be affected by some of the issues that we face in the Zimbabwean market.”
Mr Mangwendeza confirmed that the product had already met the VFEX’s minimum subscription threshold required for listing, effectively removing uncertainty around its debut.
“The VFEX has a target for us to list the asset if we can secure a minimum of US$500 000 worth of investment from subscribers. So far, we have received subscriptions and have reached the minimum of US$500 000,” he said.
He said subscriptions will remain open beyond the initial listing date as the firm seeks to grow the fund towards its US$10 million target and potentially beyond, depending on investor interest.
“Subscriptions will remain open until we reach the US$10 million target, even if we go beyond the 8 May listing date. Our intention is to grow this fund further, depending on the level of interest that we receive from new and existing investors,” he said.
Mr Mangwendeza indicated that the firm has the flexibility to scale the fund beyond its initial target, subject to regulatory approvals, suggesting potential for future expansion as demand develops. According to the Gold ETF prospectus, the fund is expected to benefit from comparatively lower round-trip trading costs on the VFEX relative to the Zimbabwe Stock Exchange (ZSE), enhancing its appeal to cost-conscious investors.
Subscriptions will be processed through a Reserve Bank of Zimbabwe exchange control-approved custodial account, providing an additional layer of regulatory oversight and investor protection. The ETF will operate across both primary and secondary markets.
On the secondary market, investors will trade units on the VFEX at prevailing market prices, which may differ from the fund’s net asset value (NAV) due to factors such as supply and demand dynamics, bid-ask spreads and liquidity conditions.
On the primary market, authorised participants will be able to create or redeem units at NAV in prescribed creation unit sizes, subject to minimum lot requirements and applicable fees. This dual-market structure is intended to enhance liquidity and ensure efficient price discovery. The prospectus highlights diversification as one of the key benefits of the Gold ETF, noting that gold typically exhibits low correlation with traditional asset classes such as equities and bonds. This characteristic allows it to serve as a potential hedge during periods of market volatility.
“This means that even when stock markets are volatile, gold prices and associated gold assets may remain stable or even increase, providing a potential buffer for investors,” the prospectus states.
The document underscores gold’s role as an inflation hedge, pointing out that as the cost of goods and services rises, the value of gold tends to increase, helping investors preserve purchasing power over time.
