We’ve been following the story of the Victoria Falls Stock Exchange (VFEX) with a keen eye, and the most recent update is that VFEX is now licenced by the Securities and Exchange Commission of Zimbabwe (SECZ).
The Victoria Falls Stock Exchange Limited (“VFEX”) is pleased to advise stakeholders that it has been granted a license to operate a securities exchange by the Securities and Exchange Commission of Zimbabwe (“SECZ”) in accordance with the Securities and Exchange Act, Chapter 24:25.
ZSE Press Release
That the stock exchange has gotten a licence is no surprise- it was announced by the Finance Minister back in May.
Recap
When it was announced, VFEX had one major goal – to attract offshore capital. Simply put the government wants to increase foreign currency reserves because we have an extremely weak currency and VFEX is what they believe can help achieve that.
To sweeten the deal, VFEX will offer tax benefits and different repatriation rules from what the existing Zimbabwe Stock Exchange offers. The tax rules were defined but the repatriation of funds which will be a bone of contention hasn’t been addressed.
What we know of VFEX
We also got confirmation that local companies will be able to list 20% or less of their shares on the VFEX. This rule was probably done to ensure that companies don’t flee the ZSE en masse if the VFEX is successful. The CEO of ZSE also explained that local companies listing on the exchange will list a different calibre of shares in order to ensure that there are no implied rates because of the VFEX.
What next after licencing?
ZSE says that following the licencing, they are finalising the following;
- the listing and membership requirements,
- setting up of the trading and depository systems.
After this, VFEX will be ready to launch but ZSE isn’t committing to a date yet.
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These shares will be used just like Old Mutual shares as a legal method of converting currency. Just keep watching the space.