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IT is hereby notified that the Securities and Exchange Commission has, in terms of section 65(3) of the Securities and Exchange Act [Chapter 24:25], approved the following regulations:—

PART I – Preliminary

Title

1. These rules may be cited as the Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019.

Interpretation

beneficiaries of the trust;
2. In these rules—

  • “acquisition issue” means an issue of securities in consideration for an acquisition of assets which does not include the extinguishing of a liability, obligation or commitment, and includes an issue of securities for an acquisition of, or merger with, another company in consideration for the securities of that other company;
    • “Act” means the Securities and Exchange Act [Chapter 24:25];
    • “acting in concert” means two or more persons co-operating for a common purpose pursuant to an agreement, arrangement or understanding, whether formal or informal, between them; and associates are deemed to be so co-operating unless otherwise proved;
    • “admission” means the admission of securities to listing on the ZSE, and “admitted” shall be construed accordingly;
    • “announce” means a statement made formally and publicly to the press for mass distribution, if required in terms of Part XII;
    • “applicant” means an issuer, including an issuer of specialist securities and a new applicant, which is proposing to apply, or is applying, for admission of any of its securities;
  • “associate”—
    • (a) in relation to an individual, means—
      • (i) a member of the individual’s family; or
      • (ii) the trustees of a trust of which a member of the individual’s family is a beneficiary or discretionary beneficiary, other than a trust which is either an occupational pension scheme or an employees’ share scheme which does not, in either case, have the effect of conferring benefits on the individual or members of the individual’s family; or
      • (iii) a company in whose equity securities the individual or any person or trust referred to in subparagraph (i) or (ii) are directly or indirectly beneficially interested or have a conditional, contingent or future entitlement to become beneficially interested and would, on the fulfillment of the condition or the occurrence of the contingency, be able—
        • A. to exercise or control the exercise of 20 per centum or more of the votes capable of being cast at general meetings on all, or substantially all, matters; or
        • B. to appoint or remove directors holding a majority of voting rights at board meetings on all, or substantially all, matters; or
      • (iv) any corporate entity in which the individual or a member of the individual’s family are beneficially interested, where the individual or member is able to exercise or control the exercise of 20 per centum or more of the votes capable of being cast at members’ meetings on all, or substantially all, matters;
    • (b) in relation to a company, means—
      • (i) a subsidiary or holding company of the company; or
        (ii) any company which exercises, or over which the company exercises, a degree of control which is less than the degree of control exercised over a subsidiary or by holding company respectively; or
        (iii) any other company which, together with the company, are both directly or indirectly controlled by a third party; or
        (iv) any company whose directors are accustomed to act in accordance with the company’s directions or instructions; or
        (v) any company whose capital the company and any other company referred to in sub paragraphs (i) and (ii) would on the fulfilment of a condition or the occurrence of a contingency be interested in the manner described in subparagraph (ii); or
        (vi) any trust that the company and any other company referred to in sub paragraphs (i) and (ii), individually or taken together, have the ability to control 35 per centum of the votes of the trustees or to appoint 35 per centum of the trustees, or to appoint or change 35 per centum of the beneficiaries of the trust;
  • “beneficial”, in relation to—
      • (a) any interest in a security, means the de facto right or entitlement to receive the income payable or other economic right in respect of that security or to exercise or cause to be exercised any or all of the voting, conversion, redemption or other rights attaching to that security;
      • (b) any other interest, means the obtaining of any benefit or advantage, whether in money, kind, or otherwise, as a result of the holding of that interest;

      and includes, in respect of the interests described in paragraphs (a) and (b), the de facto right or entitlement to dispose of or cause the disposal of the company’s securities, or any part of a distribution in respect of the securities;“beneficial owner” in relation to a security, means the person or entity with any one or more of the following—

        • (a) the de facto right or entitlement to receive any dividend or interest payable in respect of that security; or
        • (b) the de facto right to exercise or cause to be exercised in the ordinary course of events, any or all of the voting, conversion, redemption or other rights attached to such security; or

        • (c) the de facto right or entitlement to dispose or cause the disposal of the company’s securities or any part of a distribution in respect of the securities;

    “business day” means any day except a Saturday, Sunday or any public holiday;

    “capitalisation issue” means an issue of fully paid shares­ capitalised from–

    • (a) a company’s share premium;
      (b) capital redemption reserve;
      (c) fund reserves; or
      (d) a combination of any of the above to existing shareholders of the company without payment in proportion to their shareholdings at a specific date, but does not include a dividend issued en specie;

    “cash company” means an issuer, other than an investment entity envisaged by Part XVI, whose assets, to the satisfaction of the ZSE, consist wholly or mostly of cash because it has disposed of all or a substantial part of its business or otherwise ceased to have a business of sufficient substance to support its market capitalisation;

    “category 1, category 2 or category 3” refers to a transaction that is principally an acquisition or disposal by an issuer as described in Part X;

    “circular” means any document or advertisement issued to holders of listed securities by an issuer of securities, but excludes listing particulars, annual reports, interim reports, proxy forms and dividend vouchers;

    “claw-back offer” is when a company takes back remaining new shares that it had offered to its existing shareholders and offers them to other shareholders in proportion to their holdings in the form of a right to enable the shareholders to “claw back” their right to subscribe for the securities, and “claw-back issue” bears the same meaning;

    “clearing house” means a person whose main business is the clearing, netting and settlement of transactions on a securities exchange;

    “closed period” means—

    • (a) the period from the end of an issuer’s financial year end to the date of earliest publication of the issuer’s preliminary report, abridged report or provisional report; or(b) the period from the expiry of the first six months of an issuer’s financial year to the date of publication of the issuer’s interim results; or(c) the period from the expiry of the second six-month period of an issuer’s financial year to the date of publication of the issuer’s second interim results, in cases where the financial period covers more than 12 months; or(d) where an issuer reports on a quarterly basis, the period from the end of a quarter to the date of publication of the issuer’s quarterly results; or(e) any period when an issuer is trading under cautionary announcement;

    “closing price” means the price determined by the market and disseminated by the ZSE, as the last traded price;

    “Code” means a National Code of Corporate Governance in Zimbabwe or any other foreign code approved by ZSE in relation to foreign issuers;

    “controlling shareholder” means a shareholder who, alone or together with one or more associates or other parties with whom the shareholder has an agreement, arrangement or understanding, whether formal or informal, relating to voting rights attaching to securities of a company, can exercise or cause to be exercised 50 per centum or more of the voting rights at meetings of the company, or can appoint or remove, or cause to be appointed or removed, directors exercising more than 50 per centum of the voting rights at directors’ meetings of the company;

    “convertible securities” means securities which are convertible into or exchangeable for other securities accompanied by options to subscribe for or purchase other securities and “conversion” and “convertible” shall be construed accordingly;

    “corporate action” means an action taken by an issuer or any other entity or by a third party which affects the holders of securities in terms of entitlements or notifications;

    “daily official list” means the end of day trading session price list issued by the ZSE;

    “dealing” includes—

    • (a) the acquisition or disposal of securities or a right, whether conditional or absolute;
      (b) to exercise or direct the exercise of the voting rights attaching to securities, or a right of general control of securities; and
      (c) the taking, granting, acquiring, disposing, entering into, closing out, terminating, exercise (by either party) or varying of an option (including a traded option contract) in respect of any securities; and
      (d) subscribing or agreeing to subscribe for securities; and
      (e) the exercise or conversion, whether in respect of new or existing securities, of any securities carrying conversion or subscription rights; and
      (f) the acquisition of, disposal of, entering into, exercise (by either party) of any rights under, or variation of, a derivative referenced, directly or indirectly, to securities; and
      (g) entering into, terminating or varying the terms of any agreement to purchase or sell securities; and
      (h) any other action resulting, or which may result, in an increase or decrease in the number of securities in which a person is interested or in respect of which he or she has a short position;

    “declaration data” means the minimum information to be announced on the declaration date such as share name, share code, share Interntional Security Identification Number (ISIN), event type, last day to trade, election date, record date, pay date, ex date or conditions precedent;

    “declaration date” means the date on which the corporate action and the declaration data, including any conditions precedent to which the corporate action is subject, are announced and released through the media;

    “de facto control”, in relation to a company, means actual control over the management of the company, whether the control is exercised through the holding of shares or other securities in the company or the right to appoint directors of the company, or otherwise;

    “default for election” means an option that will be applied to an investor’s holdings of securities if he or she makes no election to the contrary;

    “director” means—

    • (a) a person occupying the position of director or alternate director of a company, whatever his or her designation; and
      (b) in relation to an issuer which is not a company, a person with corresponding powers and duties to the director of a company;
      and includes a person in accordance with whose instructions the directors or a director are accustomed to act;

    “election date” means the date by which the transfer secretary must have received election instructions from shareholders, including ZSE members, fund managers and global custodians;

    “equity instruments” means securities with restricted or no voting rights, which participate in the distribution of profits in a manner directly linked to the profitability of the company;

    “equity securities” means equity shares, securities convertible into equity shares and equity instruments;

    “equity share capital”, in regard to a company, means its issued share capital excluding any part of that capital which, in respect of neither dividends nor capital, carries any right to participate beyond the specified amount in a distribution;

    “equity shares” means shares which are comprised in a company’s equity share capital and which carry votes;

    “ex date” means the first trading day after the last day of trading, from which day all trades exclude the right to receive entitlements;

    “finalisation date” means the date on which an event and its details become unconditional in all respects and irrevocable and no further finalisation changes to any of the finalisation information can be made by the issuer and the event can only be cancelled;

    “first day to trade” means the first business day on which newly issued securities may be traded;

    “foreign company” means a company which is incorporated outside Zimbabwe and is registered as a foreign company under the Companies Act [Chapter 24:03];

    “foreign property” means property situated outside Zimbabwe;

    “Generally Accepted Accounting Practice” (GAAP) means the generally accepted accounting practice within Zimbabwe or, in the case of a foreign company, the generally accepted accounting practice, acceptable to the ZSE;

    “headline earnings” means the measure of earnings of the reporting entity in accordance with the formula determined and publicised through a circular by the ZSE from time to time;

    “holding company” means a company that has one or more subsidiaries;

    “immediate family”, in relation to an individual, means the individual’s spouse and children;

    “income statement” refers to the definition of “statement of profit or loss or other comprehensive income”;

    “intangible asset” means a non-monetary asset without physical substance, including goodwill, a patent, a trademark, a brand name, copyright, a franchise, a licence, know-how and a publication title;

    “International Accounting Standards” or “IAS” means the international accounting standards formulated by the International Financial Reporting Standards Foundation (IFRS);

    “International Financial Reporting Standards” or “IFRS” means—

    • (a) the International Financial Reporting Standards formulated by the International Accounting Standards Board, together with related interpretations issued by the IFRS Interpretations Committee; or
      (b) any international accounting standards that were issued by the International Accounting Standards Committee, the predecessor to the International Accounting Standards Board, to the extent that those standards have not been replaced by standards specified in paragraph (a); or
      (c) any other financial reporting framework adopted by the Public Accountants and Auditors Board;

    “International Standards on Auditing” or “ISA” means the International Standards on Auditing formulated by the International Auditing and Assurance Standards Board;

    “introduction” means a method of bringing securities to listing not involving an issue of new securities or any marketing of existing securities because the spread of shareholders already complies with the conditions for listing;

    “investment entities” means investment companies, investment trusts and unit trusts whose principal activity is investment in securities;

    “issuer” means a person whose securities are listed and traded on the ZSE;

    “issue for cash” means an issue of securities for cash for the extinction of a liability, obligation or commitment in compliance with Part VI—

    • (a) to persons who are specifically approved by the shareholders in general meeting in respect of that particular issue; or
      (b) generally approved by shareholders by the giving of a renewable mandate valid until the company’s next annual general meeting provided it shall not extend beyond 15 months to the directors of the issuer to issue shares for cash subject to these listings requirements and to any other restrictions set out in the mandate;

    “last day to trade” means the last business day to trade in a security in order to settle by record date to be able to qualify or participate in an event;

    “Letters of Allotment” or “LAs” means a document that details and confirms the amount or number of securities allotted to an applicant;

    “list date” means the date on which new shares are listed;

    “listed company” or “issuer” means a company whose securities of any class are listed on the ZSE;

    “listing” means the admission of a security to the official list and “listed” is to be construed accordingly;

    “listing particulars” means a statement by a company seeking a listing that is issued for the purpose of giving information to the public with regard to the company and contains particulars specified in these rules or any other law;

    “major shareholder” means a shareholder who, directly or indirectly, is beneficially interested in 5 per centum or more of any class of an issuer’s capital;

    “major subsidiary” means a subsidiary that represents 25 per centum or more of total assets or revenue of the group based on the latest published interim or year-end financial results;

    “market value”, in relation to a listed security, means the ruling price for that security;

    “material information” means information which, if omitted or misstated, could influence the economic decisions of users and includes a change in, or constituent of, a particular factor which may be regarded in the circumstances as being material and which exceeds 10 per centum in value;

    “material investment” means an investment of a company of at least 10 per centum interest or more in any class of securities;

    “material shareholder” means any person who is, or within the 12 months preceding the date of the transaction was, entitled to exercise or control the exercise of 10 per centum or more of the votes able to be cast on all or substantially all matters at general meetings of the listed company or any other company that is its subsidiary or holding company or is a subsidiary of its holding company;

    “merger issue” has the same meaning as “acquisition issue”;

    “minimum spread requirements” means the minimum percentage holding by members of the public in each class of an issuer’s securities, as required by section 87;

    “new applicant” means an applicant which has no securities or class of securities already listed;

    “non-beneficial”, in relation to an interest, means an interest other than a beneficial interest;

    “odd-lot” means a holding totalling less than 100 securities;

    “offer for sale” means an invitation to the public by or on behalf of a third party to purchase securities of the issuer already in issue or to be issued and includes an offer in the form of an invitation to tender at or above a stated price;

    “offer for subscription” means an invitation to the public by or on behalf of an issuer to subscribe for securities of the issuer not yet in issue or allotted, and includes an offer in the form of an invitation to tender at or above a stated price;

    “official list” means the list maintained by the ZSE of companies whose securities it has admitted to listing;

    “open market dealings” means dealings on the ZSE trading system without any prior agreement;

    “pay date” means the date on which entitlements are paid or posted;

    “placing” means a marketing of securities already in issue but not listed, or not yet in issue, to specified persons or to clients of the sponsoring broker or any securities house assisting in the placing, which does not involve an offer to the public or to existing holders of the applicant’s securities generally and which takes place immediately before the applicant is listed;

    “practice note” means a practice note issued by the ZSE from time to time to clarify or expand upon these rules;

    “pre-issued securities” means entitlements to securities whose listing on the ZSE has been approved, where the listing becomes effective only after a number of conditions have been fulfilled on or before the commencement date of official trading;

    “pre-issued trading” means a transaction effected in pre-issued securities;

    “pre-listing statement” means the statement required to be issued by companies in terms of Part VII, and includes a prospectus;

    “press announcement” means an announcement in the press in accordance with Part XII;

    “price” means the basis of the cash entitlement (for the purposes of corporate actions);

    “price-sensitive information” means unpublished information which, if it were made public, would be reasonably likely to have an effect on the price of an issuer’s securities;

    “primary listing”, in relation to a security listed on more than one securities exchange, means a listing by virtue of which the issuer is subject to the full requirements applicable to listing on that exchange in respect of that security;

    “promoter” has the meaning given to it in section 72 of the Companies Act [Chapter 24:03];

    “profit warning statement” means an announcement by an issuer prior to the publication of its financial statements indicating that its profits will be lesss than expected;

    “prospectus” means the prospectus issued by a company in accordance with the Companies Act[Chapter 24:03];

    “Public Accountants and Auditors Board” or “PAAB” means the Public Accountants and Auditors Board established by section 4 of the Public Accountants and Auditors Act [Chapter 27:12];

    “public shareholder” means a holder of a security which is regarded as being held by a member of the public in accordance with section 86;

    “publish” means to make available to the public through a newspaper of wide national circulation and any other electronic media;

    “pyramid companies” means companies classified by the ZSE as pyramid companies in accordance with the criteria set out in Part XV;

    “ratio” means the basis of share entitlement reflected as a ratio;

    “record date” means the date on which holdings, upon which an event entitlement is based, is ascertained. Record date is one settlement period after the last day to trade (currently five business days) and must be on a Friday or, if Friday is a public holiday, the last trading day of the week;

    “reference price” means the last traded price, as determined by the ZSE;

    “related party” has the definition given to in section 266;

    “renounceable offer” means an invitation by an issuer to its shareholders to subscribe by way of rights for securities in the applicant, usually the listed company’s subsidiary, where the listed company has received the right to subscribe for those securities but renounces all or part of that right to its shareholders pro rata to their shareholdings;

    “rights offer” means an offer to existing holders of securities to subscribe for or purchase further securities in proportion to their holdings made by means of the issue of a renounceable letter or other negotiable document which may be traded as either “fully paid” or “nil paid” rights for a period before payment for the securities is due;

    “ruling price” means the price at which the last sale of a security took place or, if higher, the closing bid price or, if lower, the closing offer price as published in the daily official list on the relevant day;

    “scrip dividend” means a dividend incorporating an election on the part of the shareholder to receive either capitalisation shares or cash, with default election being cash;

    “secondary listing” means a listing that is not a primary listing;

    “settlement period” means the period between the day on which a trade takes place and the date on which the trade is due for settlement, currently five business days;

    “sponsoring broker” means a member of the ZSE registered pursuant to the requirements of section 18;

    “statement of profit or loss or other comprehensive income” means the statement as described in the International Financial Reporting Standards. This term is used interchangeably with the term “income statement” throughout these rules;

    “subscribed capital” means the portion of a company’s capital which has been subscribed for by shareholders;

    “subsidiary company” means a subsidiary as defined in the Companies Act [Chapter 24:03];

    “substantial change” means a change in or constituent of a particular factor which may be regarded in the circumstances as being substantial and which, as a general rule, would normally exceed 30 per centum in value;

    “temporary documents of title” means allotment letters, split receipts, letters of acceptance, letters of rights, scrip certificates, electronic certificates and any other temporary documents of title;

    “transaction” includes—
    (a) a sale or purchase of, or an agreement to sell or purchase, any securities, including warrantsand other derivatives issued in respect of securities; and
    (b) the grant, acceptance, acquisition, disposal, exercise or discharge of any option, includingoptions in terms of a share incentive or option scheme or other right or obligation, presentor future, conditional or unconditional, to acquire or dispose of securities or any interest insecurities;

    “USD” means the currency of the United States of America, or the local equivalent thereof as determined by the prevailing bank Intermarket Rate issued by the Reserve Bank of Zimbabwe;

    “vendor consideration issue” has the meaning given to it by the definition of “acquisition issue”;

    “vendor consideration placing” means marketing on behalf of vendors of securities which must be issued to them in consideration for an acquisition;

    “viable asset” means—

    • (a)a normal operating business which shall be any company that satisfies the requirements for a new listing and capable of issuing full listing documents in terms of the Rules; or
      (b) an infrastructure project which shall be any project deriving its income predominantly fromoperations within the following sectors––
      (i) energy;
      (ii) transport and logistics;
      (iii) water and sanitation;
      (iv) agriculture;
      (v) commercial or industrial buildings;
      (vi) healthcare, educational or social infrastructure provided that—
      where the project is operating under a company or on its own it shall have audited accounts and a detailed feasibility study.
      (c) notwithstanding the provisions of this definition, the ZSE may exercise its discretion in determining whether or not an asset qualifies as a viable asset in terms of this definition;

    “warrant” means an instrument issued by a third party and listed on the ZSE, or on any other exchange that is acceptable to the ZSE, which gives the warrant holder the right—

    • (a) to buy underlying securities from the issuer, in the case of a call warrant; or
      (b) to sell underlying securities to the issuer, in the case of a put warrant;
      at a pre-determined price and in a pre-determined ratio either—
      (i) at any time from the date of issue of the warrant until a pre-determined future date; or
      (ii) on a pre-determined future date;

    “weighted average traded price” means the total value of securities traded divided by the total number of securities traded;

    “ZAPB” means Zimbabwe Accounting Practices Board established in terms of the PAAB;

    “Zimbabwe Stock Exchange” or “ZSE” means the Zimbabwe Stock Exchange Limited;

    “ZSE trading system” means the ZSE floor trading system.

PART II – Authority of ZSE

General Powers of ZSE

  • 1. These rules may be cited as the Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019.3. (1) Subject to section 65 of the Securities and Exchange Act [Chapter 24:25], the ZSE has authority to carry out the following functions—Publicationcensure the issuer or the directors by means of private
    • (a) grant, review and suspend or terminate a listing of securthe ZSE must send the issuer a letter of reminder on the next ities;
    • (b) prescribe from time to time the minimum listings requirements with which an applicant must comply before each security issued by the applicant is granted a listing;
    • (c) prescribe from time to time the minimum listings requirements with which an issuer must comply while securities issued by it remain listed;(d) suspend, alter or rescind a listings requirement before or after a listing has been granted;
    • (e) prescribe the circumstances under which the listing of securities must or may be suspended or terminated;
    • (f) prescribe the listings requirements with which sponsoring brokers and professional advisers must comply;
    • (g) impose fines, in accordance with the Twenty-sixth Schedule on i (a) where, following a take-over, the securities have become users of listed securities that fail to observe the standards referred to in these rules; and
    • (h) issue practice notes.

    (2) Subject to subsection

    (1) ZSE shall ensure that—

    • (a) it provides for the protection of investors;
    • (b) it provides a market for the raising of primary capital;
    • (c) it provides an efficient mechanism for the trading of securities in the secondary market;
    • (d) securities will be admitted to the official list only if the ZSE issatisfied that the applicant issuitable and that it is appr