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Government gazettes rules for Alternative Trading Platforms

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HARARE


The Ministry of Finance and Economic Development has gazetted Securities Alternative Trading Platform rules paving the way for the Securities and Exchange Commission of Zimbabwe to start issuing licences.

An alternative trading platform is a system that provides or maintains a market place or facilities for bringing together buyers and sellers of securities but does not set rules for subscribers or discipline or seek to control the participants other than by excluding them from trading.

Gazetted under Statutory Instrument 100 of 2016, interest applicants will pay an initial registration fee for a platform of $5 000 and an annual renewal fee of $4 000. Further to that every licenced platform shall pay a levy of 0.5% of its monthly gross income.

 

According to the SI transactions on the platform will attract a 4.136% both for buying and selling as set out below:

Type of charge Buying% Selling %
Brokerage fees 0.92 0.92
Securities and Exchange  Commission Levy 0.16 0.16
Platform Levy 0.1 0.1
Central Securities Depository Levy 0.1 0.1
Stamp Duty 0.25
Capital Gains Withholding Tax 1
Investor Protection Levy 0.025 0.025
VAT @15% on Brokerage 0.138 0.138
Total Transaction Costs 1.693 2.443
Total Costs for buying and selling 4.136  

 

SecZim chief executive Tafadzwa Chinamo said the gazetting of the rules was a welcome development as the ATPs are relevant and key to the development of the economy.

“We will provide facilities where buyers and sellers come together to trade. These buyers and sellers could as well do their trades over the counter but such transactions tend to be limited. An ATS on the other hand broadens the field to include all buyers and sellers by ensuring that money will be received by sellers and securities will be transferred to buyers. So it is safe but the ATS does guarantee either party the best price”

Companies like Old Mutual Zimbabwe currently trade over the counter.

The ATP could also provide an alternative for companies who might not want to have a primary listing in the country.

Some of the requirements for registration of the platform include a written description of the software system or programme that the platform intends to use and shall include a flowchart showing the actual primary and secondary functions.

Chinamo said the commission was currently reviewing an application from a local investor but added that overall there was appetite for ATPs in the country as there have been a lot of enquiries on the availability of such platforms

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