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Oliver Kazunga Senior Business Reporter
THE Securities Commission of Zimbabwe (Secz) says the dematerialisation of shares for companies listed on the Zimbabwe Stock Exchange has been stalled by legacy issues surrounding the securities. Dematerialisation of shares entails the conversion of physical shares into electronic format. “Most investors have registered their shares in unauthentic pseudo names, unregistered trust names among others that are not legally verifiable because of the inadequate know your customer records.

“In certain instances, some investors are not providing sufficient know your customer documentation to enable account creation,” said the Secz in a statement.

It said this also stalled overall trading on the market in an attempt to complete all due processes before trade and settlement.

The securities commission called for collective work among stakeholders to work towards enhancing activity, efficiency and transparency of the market.

“To speed up the process, the investing public is strongly advised to ensure the provision of proper and adequate documentation for know your customer requirements as stipulated.

“This will ensure the ease and speed with which accounts can be opened.”

Secz said in the absence of an investor’s account, the investing public would not be able to timeously trade on the market, as the demateralisation process virtually eliminates all manual share certificates and processes.

“Such account opening should be done in time ahead of the decision to trade in securities in order to avoid unnecessary inconveniences.

“It therefore becomes mandatory to have a CSD account for one to trade on the market.

“Investors are strongly encouraged to approach registered custodians and stockbrokers to initiate investor account opening and dematerialisation onto the CSD System,” it said.

A list of licensed custodians and stockbrokers was available on the SECZ, ZSE and CSD websites.

“From the issuer’s perspective, about 28 out of 65 listed companies have so far initiated the process of dematerialisation of their securities . . . The CSD plans to have all the listed counters onto the CSD system by the 1st of December 2014.

“To facilitate and speed up the process, companies are advised in terms of section 72 of the Securities Act (Chapter 24:25) to seek a resolution to that effect from its board of directors, board of management or other governing board to enable the conversion or issue of securities in demateralised form,” it said.