MMCZ, VFEX finalise regulations for Commodities Exchange

PHILLIMON MHLANGA

The Minerals Marketing Corporation of Zimbabwe (MMCZ) and the Victoria Falls Stock Exchange (VFEX) have finalised  crafting regulations  pertaining to the  proposed  Commodities Exchange, Business Times can report.

 

Dr. Nomsa Moyo, the acting general manager of MMCZ, confirmed  the development, stating that the regulations have been forwarded to the Attorney General for review.

Dr. Moyo said  that plans are in motion to begin with chrome.

“To begin with, we want to start with chrome then thereafter  we can move to other commodities. At the moment we have done the regulations  that will govern how the commodity  exchange  is going to operate. Those rules and regulation  have been submitted  to the  attorney general’s  office for validation,” Dr Moyo said.

 

She added: “You know like any other laws, they  pass through  attorney  general’s  office. So, they  are finalising those. When they are finalised and adopted  by the relevant  ministries then they will be published.”

 

The anticipated commodities exchange, according to Dr. Moyo, is scheduled to go live on the VFEX in the first half of 2024.

 

“All things being equal, we expect  to launch  the commodity exchange before 30 June 2024,” Dr Moyo said.

 

According to experts, the Commodities Exchange is expected to expand the mining sector, which is expected to grow into US$12 bn this year, and broaden the VFEX as well as the country’s capital markets.

They said this could be a game changer in the country endowed with vast mineral  resources as it  trades in hard currency and therefore a good funding mechanism for the mining sector, which is seen  as an enabler for economic growth.

 

Established in 2020, VFEX  is a registered  exchange  that provides a range of financial products  and services, including shares, deposit receipts, fixed income instruments, exchange traded  funds, exchange traded notes and real estate investments trusts.

It is governed by the Securities Exchange Act 24:25, SI 196 of 2020, Exchange Control Directive RV 177/2020, the Finance Act 23:04 and SI 4 of 2022 Banking  which establishes  the  Victoria Falls  Special Economic zone.

The ability for businesses to raise capital in US dollars or any other hard currency has made the stock exchange a desirable venue for capital raising.

Along with many other benefits, listed companies and investors enjoy reduced currency risk, lower transaction costs, lower dividend withholding tax for foreign investors, and no capital gains tax when selling listed securities.

 

Related