14 November 2012

Zimbabwe: SEC Suspends Mast Stockbrokers

THE Securities Commission of Zimbabwe has suspended Mast Stockbrokers for allegedly failing to register shares in its Nominees register into names of their respective owners. The six month-ban will prohibit Mast from carrying out all licensable activities other than settling outstanding deals, SECZ chief executive Mr Tafadzwa Chinamo said yesterday.

"This action has been necessitated by the firm's failure to comply with the directive issued on 29 August 2012," said Mr Chinamo in a notice to capital market players.

"The directive required the firm to register all shares in Mast Nominees into names of their respective beneficial owners by 31 October 2012 and deliver them accordingly.

"SECZ will continue engaging the firm during the period of suspension. Should the firm comply with the directive that meets the SECZ's approval, guided by the relevant legislation, the suspension will be reviewed." Mast stockbroker Mr Arnold Chibvongodze refused to comment on the suspension and referred questions to Zimbabwe Stock Exchange acting chief executive Mr Martin Matanda.

He said: "We are a member of the ZSE and Mr Matanda can comment on our behalf."

Mast is the third stockbroking firm to be suspended this year after Remo and Interfin.

The licences of the two firms were later cancelled following the suspension and investigations.

Mr Rufaro Zengeni (of Interfin Securities) and Mr Mahomed Mahmed (Remo) also had their licences cancelled. However, Remo has since made a High Court application challenging the cancellation of the licences.

Interfin's licence was revoked on the basis that it contravened Sections 24:25 of the Securities Act by carrying out activities not authorised in terms of the securities dealing firm licence after securing funding and on lending to third parties. The firm admitted to engaging in these transactions especially money market deals that fall under the Banking Act.

Remo was also found guilty of carrying out activities not authorised in terms of the securities dealing firm licence, thus acting outside the parameters of the licensable activity.

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