THE Securities and Exchange Commission of Zimbabwe (SecZim) is advocating for major reforms, specifically shifting its penalty framework from criminal to civil, to deter financial crimes in the country, businessdigest can report.
The organisation's chief executive officer Anymore Taruvinga told businessdigest in an interview that current criminal penalties were not dissuasive enough.
“One of the areas that we want to amend the Securities and Exchange Act on is to ensure that we have got a civil penalty framework, because currently we have got a criminal penalty framework,” he said.
“In terms of the criminal court, we have got a limitation that the fines that are prescribed in the criminal court are not dissuasive enough, and we would want penalties that make it prohibitive for someone to commit financial crimes."
The SecZim chief said there was a code of penalties but it was not prohibitive enough.
“The penalty framework that we currently have is pursuant to the criminal court, which makes it very difficult, and the level of fines is also not very punitive,” Taruvinga explained.
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“If you look at our criminal court, we are given up to Level 14 for civil offences, and up to Level 4, for some of the offences. For Level 6, I think it is about a US$200 penalty.”
This, he said, was not dissuasive enough as one can earn US$100 000 through illegal means, for example, making the US$200 a minuscule amount.
“So, those are the key areas that we are focusing on,” Taruvinga added.
The commission is mandated to protect investors against exchange losses, improve financial inclusion, and register, supervise, and regulate securities exchanges.
It must also license, supervise, and regulate licensed persons and encourage the development of a free, fair, and orderly capital and securities market in Zimbabwe.
“So, the main powers of the commission over issues of securities are that currently, we do not have direct oversight over issues,” Taruvinga said.
He said as far as international standards were concerned, they could not just regulate without regulating those that bring securities to the market.
Thus, he said, the adoption of sound supervisory and regulatory standards needed to be updated as some laws were outdated.
“We also need to provide for cooperation with other regulatory bodies, which is currently missing from our Act,” Taruvinga said.
“When it comes to international investigations and the transfer of information, it is something that we need to incorporate now.”
He said this would help in dealing with cases where the jurisdiction was outside SecZim’s purview.
Earlier this week, NewsDay revealed that SecZim’s Investor Protection Fund’s unclaimed shares portfolio valuation as of September 30, 2024 stood at ZiG102,50 million (US$4,11 million) and US$629 413,60.
These unclaimed assets are held by the Chengetedzai Depository Company Limited, as it operates a central securities depository for Zimbabwe’s securities industry.
The purpose of the fund is to provide compensation to protected investors for losses suffered as a direct result of a licenced contributor to the fund being unable to meet their liabilities through insolvency, malpractice, or other causes.