The Zimbabwe Stock Exchange Limited (ZSE) has been granted a licence to operate a Central Securities Depository (CSD).
A central securities depository is a specialized financial organization holding securities like shares, either in certificated or uncertificated form, allowing ownership to be easily transferred through a book entry rather than by a transfer of physical certificates.
Said ZSE chief executive Justin Bgoni:
“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.
“The ZSE decided to launch its own depository in order 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.”
Prior to getting its own CSD licence, the ZSE was using the Chengetedzai Securities Depository.
In 2014, the Securities and Exchange Commission of Zimbabwe (SECZ) directed all stockbrokers to surrender share certificates to two appointed custodian firms – Old Mutual Custodial Services and ZB Custodial Services.
Meanwhile, as at the close of the first quarter this year, unclaimed shares on the Chengetedzai Securities Depository amounted to $560 million as many investors on the local bourse have not collected their share certificates.
However, the statistics show that there has been a decline in claims over the past few years.
As at October 2020, there were only 12 claims, compared to 28 in 2019 and 107 in 2018. In 2017, the claims stood at 307.