THE Zimbabwe Stock Exchange (ZSE) has now commenced consultations with key stakeholders on Special Securities Listings Requirements with the final draft pencilled in for the fourth quarter of 2018.
According to a basic survey by the ZSE, the uptake will be high in Exchange Traded Funds (ETFs) and Real Estate Investment Trusts (REITs). The Specialist Listings Requirements spelt out, among other stipulations, the rules and procedures governing new applications and the ongoing obligations of issuers of real estate investment trust securities, warrants, structured products, exchange-traded notes, exchange-traded funds, asset-backed securities and depository receipts.
The draft rules provide the framework within which securities such as REITs and ETFs can be listed and traded on the ZSE.
ZSE acting CE Martin Matanda told businessdigest that the profile of investors in derivatives is likely to be dominated by the more sophisticated investors (institutions and foreign investors) on account of the complexity of the products and the higher risk.
While the outlook for the market depends on its responsiveness to the changing environment and investors’ needs, Matanda said the introduction of derivatives products is expected to increase the market depth and diversification potential for investors and issuers.
For derivative issuers, he said there was need for more disclosure requirements including the daily publication of net asset values (NAVs) and accrued interest for ETNs.
“The basic survey undertaken by the ZSE revealed that uptake will be high in ETFs and REITs. The ZSE is aiming to complete stakeholder consultations and submit the rules for approval by the Securities and Exchange Commission of Zimbabwe (SECZ) within the fourth quarter 2018. The ZSE is now making presentations to key stakeholders on the rules for the purposes of increasing awareness as well as to obtain feedback to the proposals,” he said.
The ZSE published the draft Specialist Securities Rules for comments in June.