Enacy Mapakame Business Reporter
The Securities and Exchange Commission of Zimbabwe’s Investor Protection Fund (IPF) has grown to $15 million, since it was established in 2009 to compensate investors in the event of losses.
The growth in the IPF helps boost investor confidence on the market. The fund levels are determined by performance of the stock market, which constitutes 45 percent of its investment.
Under the fund, licensed securities traders and dealers collect a levy on every buy or sale deal and remit the money to the regulator SECZ.
Speaking at the inaugural C-Trade Investor Day Conference in the capital yesterday, Ministry of Finance and Economic Development deputy director Public Finance Management System Unit, Mr Masausa Kaliati said the IPF was also working on programmes to enhance access to information for investors which should help boost their confidence.
Mr Kaliati is also a board member of the fund, representing the Ministry of Finance and Economic Development.
This should complement the IPF, as the country enhances protection for investors on the capital markets.
“The IPF current size is at $15 million,” he told stakeholders at the conference.
“As the IPF, we are playing an active role in the protection of investors.
“Currently we are producing a manual that will be available for potential investors to have easy access to information on how they can participate on the stock exchange,” he said.
One of the major concerns for retail investors in Zimbabwe and their limited participation on the capital markets is lack of information as well as low confidence as a result of currency and policy uncertainties.
As efforts to enhance confidence, the SECZ established the Investor Protection Fund, as provided for in terms of the SECZ Act, for the purpose of providing compensation to investors for losses suffered as a direct result of financial collapse of a market player licensed by it being unable to meet its liabilities through insolvency, malpractice or other causes.
Thus an investor will have recourse to the fund where a SECZ licensed entity is unable, or likely to be unable, to pay its liabilities, in the event of cessation of trading, or such firm having insufficient assets to meet its liabilities or insolvency declared by a competent court in Zimbabwe.