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Senior Business Reporter
THE Securities and Exchange Commission of Zimbabwe (SecZim) says tight monitoring of capital markets has ensured regulatory compliance in the sector, which has achieved 100 percent settlements of trades in 2021.

No investor assets were lost during the year, the regulatory authority said, adding that the sector is keen to play a significant role in the attainment of an upper-middle income society by 2030.

SecZim acting chief executive officer, Mr Gerald Dzangare, said in 2021, capital markets witnessed timely reporting and disclosures in line with international financial reporting standards (IFRS) and this improved investor confidence in a significant way.

Securities and Exchange Commission of Zimbabwe

“Timely transparency through financial reporting was achieved through enforcement of securities exchanges’ rules and supervision, which ensured timely cautionary statements to protect market integrity, which is critical for investor protection,” he said in his  statement accompanying the commission’s 2021 report.

“In 2021 there was marked improvement in transparency through timely disclosures of information, which has an impact on pricing and trading in securities listed on exchanges.

“Issuers of securities and securities exchanges met required minimum disclosure requirements.”

Traders- Image taken from Shutterstock

During the period under review, SecZim said it strengthened its in- depth assessment of systemically important institutions by identifying potential risks and threats to capital and financial systems that could adversely affect the risk profile of individual securities market intermediaries.

“Through supervision SecZim ensured that SMIs have a sound risk culture, effective risk governance frameworks as well as proper and adequate Adjusted Liquid Capital (ALC),” said the regulator.

“In 2021 the market achieved 100 percent settlement of trades and no investor assets were lost during the period.”
SecZim daily monitored the capital markets with focus on trading by those with privilege to companies’ operations and financial information.

“SecZim applied various surveillance tools including but not limited to analysis of traders and investors trading patterns, subjecting unusual trades to further scrutiny with some leading to partial or full-scale investigation,” it said.

To that end, a total of 48 key surveillance reports were produced on a post-trading basis and no market abuse cases were noted.

Mr Dzangare said only one case on alleged illegal foreign currency dealing was brought through a whistle-blower towards the end of 2021 and was concluded this year.

“In 2021 SecZim contributed to national priorities that are in the National Development Strategy 1, the building block to Vision 2030,” Mr Dzangare added.

Despite the effects of Covid-19, Zimbabwe’s capital markets were not interrupted much as they were already ahead of the curve as  over the years they have become largely automated.

Covid-19

Trading and working remotely was already embedded in the infrastructure of automated trading and settlement systems that had been put in place in Zimbabwe’s capital markets over the years, said Mr Dzangare.

“SecZim continued to adapt new ways of remote working and regulation and so was able to deliver its statutory objectives in the face of upheavals brought by exogenous factors from the external operating environment coupled with SECZim’ s internal capacity constraints,” he said.