ZSE shortens payments window to three days

HARARE, April 28 (The Source) – The Zimbabwe Stock Exchange says payments to dealers will now be expedited after moving to a three day payment cycle.
The local bourse will move to a T+3 settlement cycle from the current T+5 from May 2, which implies that when an investor buys shares, payment and the share certificates must change hands no later than three business days after the trade is executed.
“Chengetedzai Depository Company Limited (CDC), the Zimbabwe Stock Exchange (ZSE) and the Securities and Exchange Commission of Zimbabwe (SECZ) would like to advise capital market players, issuers of securities, investors and the general public, that the settlement cycle for trades in ZSE listed equity securities will change from T+5 (Trade date plus five business days) to T+3 (Trade date plus three business days) with effect from 2 May 2017,” said the three companies in a joint statement.
The companies said the move to a shorter settlement cycle comes after the fulfillment of a number of key enablers in 2016 such as the introduction of the CSD Penalties Framework, settlement of trades using central bank money and the introduction of collateral security to manage settlement risk.
“The shortening of the settlement cycle is expected to further improve the capital market in Zimbabwe, through introducing international best practice, reducing counterparty risk and increasing convenience for the investing public,” they said.
The bourse recently introduced view only terminals (VOT) which allow investors to view live market data as well as the listing of debt securities.
Deposit taking microfinance institution, Getbucks is taking advantage of the new development to raise $30 million through a bond. The company said it has already raised $5,4 million as part of the money raising initiative.