Key Strategic Focus Areas for the Securities and

Exchange Commission of Zimbabwe

Tafadzwa ChinamoCEO

Securities and Exchange Commission of Zimbabwe

Improve the Commission’s effectiveness in fulfilling its mandate of providing investor protection and ensuring safe, efficient and transparent capital markets

Underpins a sharper vision of the future for SECZ and maps out a clear set of goals and action plans for taking SECZ forward

Development of a complete and comprehensive regulatory framework and its enforcement

The goal is to strengthen the SECZ to anticipate and respond to the new challenges of the fast-changing, technologically-driven global financial markets.

Investor ProtectionSound Regulatory Environment Investor EducationModern Operating Systems and

StructuresManagement of Human Resources,

Information and Financial Capital

I will focus on the first four in this presentation.

SECZ has established that minority shareholders need the Commission’s protection against issuers and market players

There have been too many occasions where the interests of issuers result in actions that violate the rights of minority shareholders

Failure by the Commission to offer vulnerable groups protection will result in loss of confidence in the capital markets

The SECZ has to address investor protection with the following objectives:1. Reduce abuse of minorities by dominant shareholders or owner managers who push through their agendas regardless of the destructive effects such transactions tend to have on long term shareholder value and company viability; Dubious delistings, conflicted transactions,

2. Curb the prevalence of executives employing short-term strategies aimed at propping up share prices in order for them to benefit in personal deals leveraged on the company’s assets; (needless share buybacks)

3. Compel issuers to disclose more fully their companies’ state of affairs so that investors can make informed investment decisions (profit warnings, cautionaries)

The Commission is relatively new and still developing as a world class regulator

Development will require that the Commission continuously re-examines and where necessary make improvements to the securities laws it administers

To effect its mandate as an effective capital market regulator SECZ needs to do the following:

1. Strengthen it’s authority and powers by continually developing securities rules and regulations;

2. Partner other regulatory bodies and relevant arms of government to eliminate regulatory arbitrage and improve corporate governance;

3. Contribute to amending pieces of legislation and practices that are now out sync with modern dictates;

4. Clarify roles and responsibilities of SROs.

With such a vast spectrum of persons plying our capital markets it is important that the rules and dynamics of the game are equally familiar to all.

It is the Commission’s duty to ensure that everyone active in the market has a minimum knowledge and understanding of the products and services offered

Educated investors are better able to protect themselves thus improving market efficiencies and encouraging wider participation

The commission will therefore be:Running programs to educate investors,

players, issuers and law makers; (reach 95% of all investors, workshops)

Empowering shareholders to become active and fight abuses by dominant shareholders and company executives (double attendance and participation of minority shareholders at AGMs etc, quarterly newsletter)

The backwardness of the systems and structures of our capital markets is cause for a lot of the problems the Commission is having to battle

Poor systems limit the product and service offering

Without better operating platforms confidence on our market will always be subdued with no new issues to speak of

The Commission is therefore playing its part in:

Making it a priority that the ZSE automates its trading platform and a CSD is established;

Becoming a member of IOSCO. In turn the SECZ will compel the ZSE and the CSD to be members of their global industry bodies;

Ensuring that the ZSE is restructured to reflect a modern day exchange and that demutualisation happens.

END