ZEEM listing requirements to be gazetted

THE Zimbabwe Emerging Enterprise Market (ZEEM) listing requirements and rules, which once approved, will allow small and medium enterprises (SMEs) to list on the secondary bourse, are now with the Attorney-General’s (AG) Office for review before being gazetted into law.
Zimbabwe Stock Exchange (ZSE) acting CEO Martin Matanda told NewsDay recently in emailed responses that once ZEEM is approved it would be set up as a separate board.

“We confirm that we received input from the Securities and Exchange Commission of Zimbabwe (SECZ) on the matter and the ZEEM listings rules were accordingly finalised taking into account the said input from the regulator. The current status is that we wait for the gazetting of the rules and ZEEM will be set up as a separate board on the ZSE,” Matanda said.

He said ZSE already has a system in place for the secondary board.

Matanda added that the gazetting was expected in the next few months.

ZSE sent the framework to the AG’s Office during the first quarter of the year after receiving recommendations concerning ZEEM from SECZ in the fourth quarter of 2016.

According to Matanda, the AG’s Office had a lot of work which was delaying the process.

The listing requirements of ZEEM, that were crafted along with the idea, will still apply. These include that each ZEEM applicant needs at least $250 000, but not exceeding $9,99 million, in share capital and providing audited financials for at least one financial period prior to listing.

Also, SMEs would need to have a minimum of 50 public shareholders, achieve at least 26% public shareholding and appoint a designated adviser.

Stockbrokers’ Association of Zimbabwe chairperson Benson Gasura said stockbrokers would still play an advisory role in order to help SMEs transition to ZEEM.

“When they [SMEs] come onto the exchange they are raising cheap to long-term capital to build on their businesses, increase on their market share and also their capacity utilisation. So what we anticipate and want to see going forward are companies that will be graduating from the SME bourse to main bourse because they would have become bigger,” he said.

However, SECZ CEO Tafadzwa Chinamo said that while the economy was highly informal, stock markets were not about being informal.

“If our economy was formalising then I would say guys how do we speed up informal small companies into the mainstream economy? Because, by informalising you are simply saying that you have no rules,” Chinamo said.

He said if SMEs wanted to successfully list they would have to be more open to following the best practices such as corporate governance, auditing of accounts and all other relevant structures.–newsday