INAUGURAL MEETING 30 JANUARY 2014

Transcription

1 SECZ-ASSET MANAGERS INAUGURAL MEETING 30 JANUARY 2014

2 WELCOME SPEECH TO SECURITIES (INVESTMENT MANAGEMENT) COMPNANIES PRESENTED BY WILLIA BONYONGWE (MRS) CHAIRMAN: SECURITIES AND EXCHANGE COMMISSION OF ZIMBABWE

3 CONTENTS 1. Introduction and Background 2. Importance of the Asset Management Subsector 3. Governance Systems 4. Role of Asset Managers on Shareholder Activism 5. Conclusion

4 Introduction and Background Amendment and passage of Securities Amendment Act of 2013 on 29 th August 2013 Asset Managers now under SECZ regulation effective August 2013 Official handover by RBZ has been concluded Development has already been communicated to the market Purpose of this meeting is to chart the way forward

5 Importance of the Asset Management Sub-Sector Securities (Investment management) companies- mobilise funds for investment. They offer services to households, businesses, governments, pension funds, Insurance companies, etc There is need for AMCs to ensure that assets are supervised and held independently via depositories and custodians

6 Importance Cont... There were15 operating asset management firms as at 30 September 2013, and one firm under liquidation Combined value of assets under Combined value of assets under management was USD2,169 billion as at that date

7 Importance Cont... SECZ s role will be to ensure effective regulation and appropriate risk management systems, as well as preventing systemic risk

8 Governance Systems Asset managers should observe strict corporate governance to foster public confidence S.I. 100 of 2010 provides minimum corporate governance guidelines to SECZ licensees The law requires asset managers to publish audited financial statements, but some institutions disregard the law

9 Governance Cont... SECZ will stick to the law and take corrective action where necessary There is need for full disclosure of appropriate information

10 Role of Asset Managers on Shareholder Activism Shareholder activism: refers to ways in which shareholders can assert their power as owners of the company to influence behaviour. Asset Managers in Zimbabwe are reluctant to participate actively They attend AGMs as proxies but remain quiet on critical issues affecting listed companies

11 Role of Asset Managers Cont... Asset Managers play a critical role in advising their clients on AGMs/EGMs Asset Managers should be vigilant and raise alarm when decisions are not made in the best interest of investors They should force companies to disclose vital information that is useful to stakeholders

12 Conclusion SECZ anticipates to work together with asset managers to fulfil the Commission s legal mandate SECZ mandate includes: providing investors with high levels of protection; Reduction of systemic risk; Promotion of market integrity and investor confidence;

13 Conclusion Cont... Ensuring transparency in capital and securities market; Preventing market manipulation, fraud and financial crime; and Promoting investor education.

14 SECZ-ASSET MANAGERS INAUGURAL MEETING 30 JANUARY 2014 LICENSING

15 ASSET MANAGERS REGISTRATION REQUIREMENTS

16 LEGAL FRAMEWORK Section 38(1)(c) of the Securities and Exchange Act[Chapter 24:25] Para D of the 3rd Schedule to the Securities (Registration, Licensing and Corporate Governance) Rules, 2010, S.I. 100/2010. The licensing procedure incorporates registration of asset managers in terms of sections 4, 5, 6 and 7 of the Asset Management Act[Chapter 24:26]

17 COMPANY DOCUMENTS -section 5(2) Asset Management Act Memorandum and Articles of Association Certificate of incorporation Insurance policy

18 CAPITAL REQUIREMENTS Section 5(3)(c) of Asset Management Act and paragraph 6 to the 6th schedule of S.I. 100/2010 Capital adequacy requirement - net assets of USD$ A business plan in terms of section 7 of the Asset Management Act should be submitted.

19 REGISTRATION FEES $ for initial applications $ for renewal of applications Part1of2ndscheduletoS.I.100/2010.

20 PRINCIPAL OFFICER, COMPLIANCE OFFICER AND KEY PERSONNEL Sections 5(3)(b) and 9 of Asset Management Act, section 41 of Securities and Exchange Act and parad to the 3 rd schedule of S.I. 100/2010) Fit and proper test Birth certificates National Identity card 2 passport size colour photos Detailed CVs Police clearance certificate Academic and professional certificates -these include O and A level certificates, diploma/ degree certificates and transcripts.

21 RENEWAL OF LICENCES Completed Application forms Fees -$3000 Capital -$ Insurance Policy Information on changes

22 REGISTRATION PROCESS Applications should be submitted to the Securities and Exchange Commission. The Commission will issue licences which are renewed yearly. Failure to meet renewal conditions may result in suspension or cancellation of the licence.

23 REGISTRATION PROCESS cont The Securities Amendment Act was published on August In line with section 38 of the Securities Amendment Act, a person who immediately before the commencement of the Amendment Act was registered in terms of the Asset ManagementActshallbedeemed,foraperiodof twelve months to be a holder of an appropriate licence under section 38 of the Securities and Exchange Act.

24 REGISTRATION PROCESS cont To ensure that all persons are afforded a reasonable opportunity to obtain the appropriate licence, all asset managers should have obtained a licence by 30 September The consideration of deemed licence expires on 30 September Renewal fees $ Other conditions same as new. Effective renewal begins in Licensingperiod is1januaryto31december.

25 PUBLICATION OF NAMES Commission will publish the list of licensed players in the Gazette as provided in section 5(5) of the Asset Management Act. The Commission mayalsopublishthelistinotherlocalmedia. The names of those that would have successfully renewed their licences in time will be published onayearlybasis. Everyone should adhere to the deadline and full applications should be submitted in time to meet the deadline.

26 PUBLICATION OF NAMES cont Where an application is received late and the licence subsequently issued, SECZ will publish the name in the Gazette only - sec 5(5) of Asset Management Act. Commission has no obligation to publish the namesoflicencesgrantedoutoftimeinother local media. Names will be published soon after 30 September 2014.

27 REALIGNMENT OF LAWS Securities and Exchange Act Asset Management Act Collective Investment Schemes Act Rules

28 THANK YOU GOOD LUCK

29 SECZ-ASSET MANAGERS INAUGURAL MEETING 30 JANUARY 2014 SUPERVISION AND SURVEILLANCE

30 CAPITAL FRAMEWORK Current Status (Off-site based) AIMZ Proposal ( 3 months operating cost model) Positive Net Worth (Defined & Prescribed Assets coverage)

31 Capital framework RBCA Steering Committee (Collectively crafted framework) Approved framework (1 October 2014)

32 UNIT TRUSTS Outstanding Audits (30 June 2014) Money market funds-assets (Immediate)

33 UNIT TRUSTS Dormant funds (Immediate) Operating Accounts (Role of Trustees)

34 Custody & Registration of Assets Asset Managers & CSD environment Registration of physical certificates Independent Custodial services (30 April 2014)

35 CODE OF PRACTICE Section 21-Asset Management Act S.I. (Q3-Q4)

36 SUPERVISORY FRAMEWORK Prudential visits (all firms) Returns (Structure & Dates not changing, Sec. 22) Risk based framework (Will remain) Rules based framework to complement RBS

37 Other Matters Performance measurement & reporting Trustees & Custodians (Active roles) SECZIM (Investor education) Rules (Section 24-Asset Management Act)

38 AIMZ Matters for Discussion Publication of financials (Annual Reports must be published on the website & Submitted to SEC in terms of Act)

39 THANK YOU TATENDA