What a SECZ’s licence means

Generally, SECZ licenses, supervises and regulate all key participants on Zimbabwe’s securities market. Here SECZ’s primary concern is on the need to ensure high standards of professionalism and integrity on the part of licensed players. Therefore, Capital Market players should demonstrate fitness for licensing at the time they apply and must continue to do so throughout the period that they are in operation. In licensing, SECZ assesses both the firm and the individuals manning the business.

a) Firm licence – For a firm, fitness for licensing is assessed in terms of the firm’s ability to carry out its obligations under securities legislation, including the maintenance of:

Capital adequacy which is based on the operational costs, required capital expenditure and the risk taken by the intermediary
Professional Indemnity cover
Robust compliance systems
Financial status or solvency
Fitness for licensing is assessed through proficiency, integrity and solvency
criteria.

A licensed person should be equipped with the necessary technical skills and professional expertise to be “fit”, and should be aware of the relevant ethical standards and regulatory knowledge to be “proper” in carrying out regulated activities.

b) Individuals – For individual players, licensing means that they have met the minimum standards for education and relevant experience and that they have :

Skills – Licensing means that the individual has met the right skills and proficiency requirements for their licensing category.
Ethical business practices – The integrity of individual representatives is one of the key components in assessing fitness for licensing. Individuals are subject to background and police checks and all licensees are required to renew their licences each year.

Suitability – Licensed securities advisers and dealers have an obligation to recommend investments that are suitable for investors.
Always deal with Licensed Players and if in doubt verify their licensing status with SECZ. Dealing with licensed players guarantees you of investor protection and minimises the risks of fraud.

But! Remember licensing doesn’t guarantee the growth of your investments, you still need to make careful investment choices.