1. “Pensions and Capital Market Development” The Securities Commission S e c of Zimbabwe

2.  Background  Introduction - Role of SECZ  Developing our Capital markets (what needs to be done)  Role of the Pensions Industry in Developing our Capital Markets  Conclusion

3.  Adoption of the multicurrency system in 2009  US$ share prices – investors disappointed  Reduction in participation by investors – including Pension Funds  Liquidity challenges apparent  Price discovery mechanisms – what’s going on  Reduction in credible investment options

4.  Provide high level of investor protection  Promote market integrity and investor confidence  Prevent market manipulation and ensure transparency in capital markets and promote investor education.  Support and facilitate any efforts that are targeted at broadening and deepening capital markets.  SECZ, as part of its mandate, inculcate ethical conduct in the capital markets through SI. 100 / 2010 the Securities (Registration, Licensing and Corporate Governance) Rules. The Fourth Schedule gives a guideline on corporate governance practices by licensed capital markets players.

5. What we need to do  Mordenisation  Trading – online continuous automated trading. Call over system just not good enough  Centralized scrip management – we need a CSD (Central Securities Depository). The inefficiencies with the present paper system kill market integrity  Settlement – real time clearing and settlement of trades

6. What we need to do (cont’)  Best practice standards (rules & regs)  Listing rules – upgrade present ones, emphasize disclosure in reporting, corporate governance & corporate actions, act promptly on transgressors, educate market on rules  SECZ rules – provide for the regulation of financial services and markets and to ensure the organized, safe, public, fair and efficient operation of markets; and to protect the rights and interests of investors; will be gazetted before year end

7. What we need to do (cont’)  Investor education & public awareness  Start with the obvious – effects of dollarisations (explain what happened)  Formalise qualification criteria for players – introduce a securities institute with qualifications similar IOBZ, ICAZ. SECZ already on it.  Introduce programs in schools – get people to appreciate money & investments

8. What we need to do (cont’)  Improve Liquidity (turnover on markets)  Do some serious selling – someone needs to actively market/sell our capital markets; listings (mining), attract new investors;  Wider product offering – ordinary shares alone not enough (introduce options, warrants, debentures, bonds, etc)  New exchanges – one exchange is not enough (commodities exchange makes sense)

9. What we need to do (cont’)  Investor Protection  Part & parcel of investor education/protection, rules & regs – education/knowledge first line of defense  Visible intervention by authorities and big players (pensions) – minorities need to feel that someone has their back  Investor Protection Fund – one already in place through SECZ.

10.  Mordenisation  Automated Trading – why are you using Pass Books if you can have ATM cards, you must demand it,  Central Securities Depository – don’t keep your own scrip use Custodian instead; when CSD implementation comes become the driver  Real time clearing and settlement of trades – current settlement cycle is costly and prone to abuse (stop the loss of your members’ value)

11.  Best practice standards (rules & regs)  Listing rules – know the rules or at least ensure your investment managers do, cause the rules to be improved where necessary and use them to assert your rights  SECZ rules – the rules are still at drafting stage so give us your comments, when they become law it will be too late

12.  Investor education & public awareness  Dollarisation/Conversion - the pensions industry needs to close this chapter  Formalise qualification criteria for players – Insist that people who handle your assets are qualified/accredited  Introduce market awareness programs – pensions industry can play a big part in educating the Zimbabwean workforce about capital and where how their pensions are invested

13.  Improve Liquidity (turnover on markets)  Do some serious selling – pensions industry should keep an open mind and not close out capital market products  Wider product offering – embrace new products (don’t shun them)  New exchanges – support their incubation through funding startups and utilise their product offering through trading

14.  Investor Protection  Shareholder activism – follow events/corporate actions closely, investment managers must represent your wishes when voting, work with the SECZ & ZSE in writing wronges

15. Discussion