Introduction of traded funds gets boost

THE introduction of Exchange Traded Funds (ETFs) by the Zimbabwe Stock Exchange (ZSE), received a major boost last Friday after Government gazetted Statutory Instrument 240 of 2019 to pave way for the registration of various investment instruments with the Securities and Exchange Commission of Zimbabwe.

ZSE chief executive Mr Justin Bgoni in a notice to the public said; “The Zimbabwe Stock Exchange Limited hereby notifies all stakeholders that the above mentioned Statutory Instrument has been published in the Government gazette of November 15, 2019 by the Minister of Finance and Economic Development.

“The publication of the Statutory Instrument paves way for the registration of various investment schemes with the Securities and Exchange Commission of Zimbabwe, including Exchange Traded Funds.”

The gazetting of SI-240 of 2019 was pursuant to the Minister of Finance and Economic Development, Professor Mtuli Ncube’s approval of amendments on Statutory Instrument 172 of 1998 by the Securities and Exchange Commission of Zimbabwe (SECZ).

Reads part of SI-240 of 2019: “It is hereby notified that the Minister of Finance and Economic Development has, in terms of section 118 (6) of the Securities and

Exchange Commission Act [Chapter 24:25] as read with section 42 of the collective Investment Scheme Act [Chapter 24:19], approved the following regulations made by the securities and Exchange Commission:These regulations may be cited as collective investment schemes (Internal Schemes) (Amendment) Regulations, 2019 (No.5).

“The collective investment schemes (Internal Schemes) Regulations, 1998, published in Statutory Instrument 172 of 1998 were amended in section 2 to incorporate and securitise various schemes that entail the commodity fund, exchange traded fund, private equity fund, real estate investment trust scheme and venture capital fund.”

The law provides that investment schemes are listed as securities upon declaration in terms of the Securities and Exchange Act [24:25]. As such, the afore-mentioned schemes shall effectively become securities before year end.

“Securities underlying such schemes have to be declared securities in terms of the Securities and Exchange Act [24:25] for them to be listed on the ZSE.

The declaration will be done by way of a Statutory Instrument, which is anticipated to be published before the end of the year,” added Mr Bgoni.

Incorporation of fresh products into the portfolio of tradable securities is a strategy meant to stimulate an investment culture in the country as well as to impart vital and wide knowledge of capital markets to as many as possible.

ZSE indicated in October that it was set to introduce exchange traded funds as part of its efforts to offer wide investment choices.