HARARE, May 21 (The Source) – Zimbabwe’s Central Securities Depository firm says it will rely on moral suasion to convince the remaining nine of the 61 listed companies that are yet to switch to the electronic platform as the country’s equities market looks to complete its automation, an official said.
Gerald Katerere, risk and compliance manager at Chengetedzai Depository Company, said the firm has engaged the local bourse to persuade issuers of shares to dematerialize, saying legal gaps between laws governing business had resulted in the delays. Early this year, the firm had set a March deadline to complete the process.
“It’s more like moral suasion to these counters because Section 72 (of the Companies Act) says the board of directors of the issuers can either make a decision or they can go to their shareholders to make that decision to allow their shares to be dematerialised. This is primarily because of the gap that is there between the Companies Act and the Securities and Exchange Act,” Katerere said during an Imara Capital investment conference.
“You would be aware that the Companies Act only makes reference to a paper-based title whereas the Securities and Exchange Act makes provision for an electronic based title. What we have been doing over this period and considering the pressure that is there with the coming up of the automated trading system, we have engaged the Zimbabwe Stock Exchange to collectively ensure that these counters are on board.”
So far, 52 out of the 61 counters trading on the ZSE have migrated to the new settlement platform since Chengetedzai Depository Company (CDC) commenced the migration in September last year.
In March 2014, the ZSE signed a contract for the supply and installation of the Capizar Automated Trading System by Infotech Middle East FZ LLC.
Chengetedzai’s failure to complete the migration of shares delayed the process to link the ATS to the CSD, which had been scheduled for completion by February.