How to participate on the FINSEC ATP

The Financial Securities Exchange (FINSEC) is the second securities exchange in Zimbabwe and the first Alternative Trading Platform (ATP).

TO UNDERSTAND the benefits of participating on the FINSEC ATP there is need to zero in on the word ‘alternative’ which forms the foundation upon which the ATP rests. In brief the FINSEC ATP is available as another possibility for the listing and trading of securities.

FINSEC brings a new dimension to listings; its rules are simple, short and to the point. The main consideration is that issuers seeking admission on the FINSEC official list should appoint a financial advisor licensed by the Securities and Exchange Commission of Zimbabwe. New issues, for example Initial Public Offerings (IPOs), are subject to publication of an offer document whilst pre-listing statements are prerequisite for listings by introduction.

Public institutions and state enterprises are eligible to bring securities on to the ATP, but an applicant which itself seeks listing must be incorporated as a private or public company. Thus, FINSEC is a platform for the listing of government paper, municipality bonds as well as corporate bonds, equities, Exchange Tradeable Funds and various alternative securities.

The capitalisation threshold for applicants is US $1 million or a lower figure as the FINSEC Listings Committee may recommend particularly for the SME segment. Prospective issuers must possess financial statements.

There are several benefits to listing on the FINSEC ATP. For issuers (companies that are listed on FINSEC), the FINSEC ATP recognises that it is not a regulator and therefore does not set rules for issuers, discipline or seek to control them other than by excluding them from trading as provided for in Statutory Instrument 100 of 2016.

FINSEC’s alternative technology aids and lubricates the modern issuance and trading of securities. The technology offers home grown solutions at lower cost yet meeting international standards.

The technology is unique and self-contained. It enables companies seeking capital to reach as many investors as possible

FINSEC is focused on reaching the alternative investor segments because, by concept, it is designed to demystify the notion that securities trading is meant for the elite.

It aims for an increased participation of different classes of investors, especially individuals through the integration of common place tools such as SMS, USSD and mobile money services. FINSEC therefore gives an opportunity to people in marginalised and peripheral areas to save money through investments in securities markets.

Apart from serving as an alternative means of accessing liquidity for issuers and traders, FINSEC is broadening and deepening the capital market by venturing into an array of securities that were previously excluded from formal trading. FINSEC is introducing modern, globally accepted securities that will expand the local scope of the securities markets.

This new definition of exchange tradeable securities increases the possibilities available to investors for hedging against risk and widens the investors’ chances of earning from a wider spread of investments. Investors keen on buying and selling securities on the FINSEC ATP only need to open an ATP account with their preferred stockbroker or custodian in Zimbabwe.

In conclusion, the FINSEC ATP offers various alternatives in the issuance, trading and settlement of a wide array of securities through a new definition of technology that integrates alternative methods of communicating orders and settlement such as SMS and mobile money services respectively.

The Financial Securities Exchange is a Zimbabwe registered company and a member of the Escrow Group. The Escrow Group has interests in the financial services and technology sectors. Corpserve Registrars and Escrow Systems are the other members of the group.