Govt gazettes VFEX exchange control regulations
HARARE – Government has gazetted regulations that will guide the setting up of the Victoria Falls Stock Exchange (VFEX) under Exchange Control Regulations.
This comes as the Finance Minister has set an end of August deadline for the operationalisation of the exchange, according to Treasury sources.
The VFEX, which is being spearheaded by the Zimbabwe Stock Exchange will target businesses operating in the main sectors in the economy such as, mining, tourism, horticulture, tobacco, and Finance.
According to Statutory Instrument 196 of 2020, securities, which will be listed on the VFEX shall be traded solely in United States dollars. In addition, companies that are resident in Zimbabwe and that are listed on the ZSE may list on the VFEX not more than 20% of its capital at any time on the ZSE provided that any capital raised by such a company on the VFEX shall be from an offshore source or from free funds.
A company that is non-resident may list on the VFEX provided that any capital is from an offshore source or from free funds and that a non-resident company that had delisted from the ZSE in the 5 years preceding its listing on the VFEX shall reinvest or employ in Zimbabwe 20% of the capital raised on the VFEX no later than five years from the date it was raised.
The regulations also say that a Zimbabwean resident company, and, which is not listed on the ZSE, may apply for a listing provided that capital is from offshore or free funds and that at least 20% of such capital shall be re-invested in Zimbabwe no later than five years from the date it was raised.
Any capital which is raised through a VFEX listing may be held in an approved local or offshore account with an internationally recognised banking institution.
The Listings Rules will be approved by the Securities and Exchange Commission while the clearing and settlement structure will also be approved by the same in consultation with the Reserve Bank of Zimbabwe.
The VFEX’s first listings are expected to be of the three dual listed stocks, which were suspended from the ZSE; Old Mutual, PPC and Seed Co, once they are in agreement to the modalities involved. Several mining companies are also in discussion over possible listings.ONLINE