HARARE – The Zimbabwe Stock Exchange (ZSE) is set to launch its own Central Securities Depository (CSD), making it the second in the country.
“The Zimbabwe Stock Exchange Limited (“ZSE”) is pleased to advise stakeholders that it has been granted a licence to operate a Central Securities Depository by the Securities and Exchange Commission of Zimbabwe in accordance with the Securities and Exchange Act, [Chapter 24:25] and the Securities (Registration, Licensing and Corporate Governance Rules, S.I 100 of 2010,” ZSE Chief Executive Officer Justin Bgoni announced in a press release this Wednesday.
Bgoni said that the move to launch the ZSE Depository is driven by the need to improve operational efficiencies in the market, reduce market costs to all participants, make it easier for retail investors to access the market, and facilitate the introduction of new products.
“This is also in line with international best practice where an Exchange owns its depository,” he added.
The ZSE Depository will become the second following the launch of Zimbabwe’s first CSD company, Chengetedzai Depository Company Limited in 2014.
“The official launch date for the ZSE Depository will be announced in due course,” said Bgoni.
A CSD is a systemically important institution in the securities market that by providing a specific range of services to securities issuers makes it possible to issue securities, while enabling market participants to fulfill the obligation of transferring securities and making payments for them as the final phase of the transfer of securities from the seller to the buyer.
A CSD may offer its clients a diverse range of services, which varies in individual countries according to the level of development and the size of the local securities market, as well as its cross-border connections. Some of its key services include the initial recording of securities in a book-entry system, providing and maintaining securities accounts at the top tier level (central maintenance service), and operating a securities settlement system (settlement service).
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