CHAPTER 24:25

SECURITIES ACT

Act 17/2004

ARRANGEMENT OF SECTIONS PART I

PRELIMINARY Section

1. Short title and date of commencement.

PART II

SECURITIES COMMISSION

3. Establishment of Securities Commission.
4. Objectives, functions and powers of Commission.
5. Membership of Commission.
6. Nomination committee.
7. Disqualifications for appointment to Commission.
8. Chairperson and vice-chairperson of Commission.
9. Terms of office and conditions of service of commissioners.
10. Vacation of office by commissioners.
11. Suspension of commissioners.
12. Filling of vacancies on Commission.
13. Meetings and procedure of Commission.
14. Chief Executive Officer and staff of Commission.
15. Panels and working groups.
16. Commissioners and staff to disclose certain connections, interests and assets.
17. Minutes of proceedings of Commission and its panels and working groups.
18. Remuneration and allowances of commissioners.
19. Policy directions to Commission.
20. Reports of Commission.
21. Non-disclosure of confidential information.
22. Validity of decisions and acts of Commission.

PART III

FINANCIAL PROVISIONS RELATING TOCOMMISSION

23. Funds of Commission.
24. Financial year of Commission.
25. Investment of moneys not immediately required by Commission.
26. Accounts of Commission.
27. Audit of Commission’s accounts.
28. Powers of auditors.

PART IV

REGISTRATION OF SECURITIES EXCHANGES

29. Securities exchanges to be registered.
30. Registration of securities exchange.
31. Terms and conditions of registration of securities exchange.
32. Registration certificates.
33. Register of securities exchanges.
34. Annual fee payable by registered securities exchange.
35. Amendment of registration.
36. Cancellation of registration.
37. Registration and cancellation of registration to be notified in Gazette and in newspaper.

PART V

LICENSING OF BROKERS ANDOTHERPERSONS

38. Persons requiring to be licensed.
39. Persons disqualified from holding licence.
40. Application for licence.
41. Grant or refusal of licence.
42. Terms and conditions of licence.
43. Form and period of validity of licence.
44. Renewal of licence.
45. Register of licences.
46. Notification by licence-holder of change in particulars.
47. Amendment of licence.
48. Cancellation of licence.
49. Suspension of licence.

PART VI

TRUSTACCOUNTS

50. Certain licensed persons to maintain trust accounts.
51. Books of account relating to trust accounts.
52. Trust account moneys not to form part of licensed person’s assets and excluded from attachment.
53. Control of operation of trust account.
54. Orders as to costs.
55. Bank or other institution not deemed to know that funds are held in trust.
56. Limitation of set-off, etc., against trust account.
57. Saving of licensed person’s rights against funds in trust account.
58. Commission may require certified balance of trust account.
59. Offences in relation to trust accounts.

PART VII

REGISTERS OF INTERESTS IN SECURITIES

60. Interpretation in Part VII.
61. Licensed persons to keep registers.
62. Commission may inspect and publish register of interests.

PART VIII

MANAGEMENT OF REGISTEREDSECURITIES EXCHANGES

63. Listed securities.
64. Delisting or suspension of listing of securities and omission of prices from quotations of prices.
65. Rules of registered securities exchanges.
66. Liability for contraventions of rules.
67. Delegation of powers.

PART IX

CENTRAL SECURITIES DEPOSITORIES

68. Interpretation in Part IX.
69. Scheme for establishment of central securities depository.
70. Transfer of deposited securities.
71. When transfer of deposited securities may be refused.
72. Issue of dematerialised securities.
73. Effect of registration of central securities depository as holder of securities.
74. Authentication of documents of title to deposited securities.
75. Confirmation of transactions.
76. Maintenance of accounts by central securities depository and probative effect thereof.
77. Certification of names of depositors.
78. Withdrawal of deposited security from central securities depository.
79. Mortgaging or pledging of deposited securities.
80. Exemption of central securities depository and participants from liability.
81. No rectification of records and accounts of central securities depository.
82. Non-application of certain provisions relating to insolvency and liquidation.
83. Rights of central securities depository on insolvency or liquidation of participant.
84. Reports and information to be furnished to Commission by central securities depository.
85. Duty of central securities depository and participants to take security measures.
86. Duty to maintain secrecy.

PART X

MISUSE OF INSIDE INFORMATION

87. Interpretation in Part X.
88. Prohibition against misuse of inside information.
90. Criminal penalty for misuse of inside information.
91. Civil liability for misuse of inside information.
92. Class actions for misuse of inside information.
93. Assessment of penalties.
94. Contracts valid despite misuse of inside information.
95. Protection of other rights.

PART XI

IMPROPER TRADING PRACTICES

96. False trading and market manipulation.
97. Fraudulently inducing person to trade or deal in securities.
98. Civil liability for contraventions of Part XI.
99. Class actions for contraventions of Part XI. PART XII

SUPERVISION OF INSTITUTIONS

100. Commission may demand information.
101. Appointment of inspectors.
102. Powers of inspectors.
103. Investigation into operations of licensed person, registered securities exchange or central securities depository.
104. Procedure on completion of investigation.
105. Action by Commission following investigation.
106. Expenses of investigation.
107. Inspectors to maintain secrecy.

PART XIII

GENERAL

109. Order prohibiting anticipated or actual contraventions of certain provisions of this Act.
110. Special provisions relating to winding up or judicial management of registered securities exchange, licensed person or central securities depository.
111. Observance of rules of natural justice.
112. Commission may require particulars of financial journalists.
113. Unsolicited calls.
114. False statements, etc.
115. False use of name or description implying connection with registered securities exchange.
116. Evidence and presumptions.
117. Jurisdiction of regional magistrates.

PART XIV

SAVINGS ANDTRANSITIONAL PROVISIONS

119. Repeal of Cap. 24:18. 120. Amendment of Acats.
121. Transitional provision: first commissioners.

SCHEDULES

First Schedule: Powers of Commission.

Second Schedule: Requirements for Registration of Securities Exchange.

AN ACT to establish a Securities Commission and to provide for its objectives, functions and powers; to control and regulate the marketing of securities and investment in securities; to regulate and register securities exchanges; to regulate and license persons who trade or deal in or manage securities; to provide for the establishment and functions of central securities depositories to facilitate the marketing and transfer of securities; to prohibit individuals who have inside information relating to securities from dealing in those securities and to provide for criminal and civil penalties for such dealing and for other improper practices; to repeal the Zimbabwe Stock Exchange Act [Chapter 24:18]; to make consequential amendments to various other Acts; and to provide for matters connected with or incidental to the foregoing.

[Date of commencement : 1st June, 2008.]

PART I

PRELIMINARY

1    Short title and date of commencement

This Act may be cited as the Securities Act [Chapter 24:23].

              2    Interpretation

(1) In this Act—

“central securities depository” means a facility or system for holding securities which

• is established under a scheme approved by the Commission in terms of section sixty-nine; and
• enables transfers and other transactions relating to the securities to be effected by entries in a record or account, whether electronically or otherwise; and
• provides facilities for
  • the reporting and comparison of data in regard to transactions involving deposited securities; and
  • the reduction of the number of separate transactions involving deposited securities; and
  • the netting or allocation of obligations arising out of transactions involving deposited securities;

and

• acts as an intermediary in facilitating payments and deliveries of or in connection with transactions involving deposited securities;

“Chief Executive Officer” means the person appointed as Chief Executive Officer of the Commission in terms of section fourteen;

“Commission” means the Securities Commission established by section three;

“Commissioner” means a member of the Commission appointed in terms of section five;

“committee”, in relation to a registered securities exchange, means the committee, board or other body responsible for managing the affairs of the exchange;

“deal in securities” means to enter into an agreement

• to acquire, dispose of, subscribe for or underwrite any security; or
• to secure a profit from the yield of any security or from fluctuations in the price of any security; or to offer to enter into any such agreement or to attempt to induce a person to enter into any such agreement;

“fixed date” means the date fixed in terms of subsection (2) of section one as the date on which this Act comes into operation;

“group of companies” means companies or other bodies corporate that are related to each other as holding company and subsidiary, or as subsidiaries of the same holding company, for the purposes of section 143 of the Companies Act [Chapter 24:03];

“guarantee fund” means the guarantee fund established in terms of rules referred to in paragraph (k) of subsection (1) of section sixty-five or in paragraph (l) of subsection (1) of section sixty-nine, as the case may be;

“inspector” means a person appointed as an inspector in terms of section one hundred and one;

“licence” means a licence issued in terms of this Act, and “licensed” shall be construed accordingly;

“licensable activity” means any of the following activities, when carried on for remuneration that bears a direct relation to the activity

(a)    brokering or dealing in securities, that is to say

• entering into an agreement on behalf of another person to acquire, dispose of, subscribe for or underwrite a security; or
• offering to enter into an agreement referred to in subparagraph (i) or attempting to induce someone to enter into such an agreement; (b) the giving of investment advice, that is to say—
• advising other persons on their investments in securities;
• issuing or publishing analyses or reports on securities;
• on behalf of a client, undertaking the management of a portfolio of securities for the purpose of investment, including the arranging of purchases, sales or exchanges of securities through a licensed dealer;
• investment management, that is to say managing another person’s portfolio of investments, where the portfolio consists wholly or mainly of securities;
• holding securities in custody for another person and dealing with them to the extent necessary for that custody;
• on behalf of an issuer of securities, recording transfers and other transactions relating to those

securities;

“listed security” means a security that is listed on an official list;

“member”, in relation to a securities exchange, means a dealer who is entitled or permitted to deal in securities on that exchange;

“Minister” means the Minister of Finance and Economic Development or any other Minister to whom the President may, from time to time, assign the administration of this Act;

“official list” means the list of securities kept by a registered securities exchange in terms of section sixtythree;

“operator”, in relation to a central securities depository, means the person who operates the depository under a scheme approved by the Commission in terms of section sixty-nine;

“registered”, in relation to a securities exchange, means registered in terms of Part IV;

“rules”, in relation to

• a registered securities exchange, means rules referred to in section sixty-five;
• a central securities depository, means rules made under a provision of a scheme referred to in paragraph (n) of subsection (1) of section sixty-nine;

and includes any amendment of such rules;

“securities exchange” means a person or entity that constitutes, maintains or provides a market place or facility, including an electronic trading system, at which or by means of which

• buyers and sellers of securities can be brought together; and
• offers to buy, sell or exchange securities can be regularly made and additionally, or alternatively, accepted;

“security” means

(a) any share or stock in the share capital of a company; or (b)  any debt security, that is to say—

• any instrument creating or acknowledging indebtedness which is issued or proposed to be issued by a company, including any debenture stock, loan stock, bond or note; or
• any loan, stock, bond or other instrument creating or acknowledging indebtedness which is issued on behalf of a government, statutory body or local authority;