9 February 2014

Zimbabwe: SECZ Gets Tough On Asset Managers

ASSET management companies must be transparent because they are custodians of substantial public funds, the Securities and Exchange Commission (SECZ) has said.

The regulator is currently carrying out an inspection exercise of various asset managers' books of accounts which have not been audited since 2009.

SECZ chairperson, Willia Bonyongwe said the public stood to lose their hard-earned monies if there was any oversight.

"Asset management companies must ensure that they get into shape and follow the law in terms of the Acts which govern them and must also be transparent, we need to know [what they are doing]," she said.

She said that the local bourse was capitalised to the tune of about US$5 billion and US$2 billion of that figure was under the purview of asset management companies.

"Asset management companies have been very placid. So if these people are going to be silent, it's a huge problem. There is need to ensure that the listed companies are running properly," said Bonyongwe. "When you say that you are not declaring a dividend to a unit trust holder, what has the management got out of it, what has the company got out of it?"

The SECZ recently hosted an inaugural meeting with asset managers who were previously regulated by the central bank.

The gazetting into law of the Securities Amendment Bill in August last year paved way for asset managers and managers of collective investment schemes to fall under the regulation of SECZ.

SECZ head of supervision and surveillance, Norman Maferefa told Standardbusiness that the whole inspection exercise was expected to take between six to seven months and would cover 15 asset management companies.

"The team carrying out the inspections will then present the findings in a report before final analysis. One inspection takes between 21 to 30 days to complete," he said. "We will not only be assessing the companies' balance sheets but looking at the clients' assets, how they have been managed, whether the assets are available and physically checking them out one by one."

Local investors are split into retail and institutional investors and the institutional base is predominantly led by pension funds, insurance and local asset management firms.

Foreign investors are mainly in the form of fund managers and are permitted to trade via members of the exchange.

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