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 appropriate for those securities to be listed;
    • (e) full, equal and timeous public disclosure must be made to all holders of securities and the general public regarding corporate actions and material information of an issuer;
    • (f) holders of securities must be given full information and afforded adequate opportunity to consider in advance and vote upon substantial changes in the issuer’s business operations and matters affecting the issuer’s constitution or shareholders’ rights;
    • (g) all parties involved, whether directly or indirectly, in the dissemination of information to the market, or to holders of relevant securities or to the public, must observe the highest standards of care;
    • (h) all holders of the same class of securities of an issuer are entitled to fair and equal treatment in respect of their securities;
    • (i) the listings requirements and the continuing obligations set out in these rules are designed to promote investor confidence in the standards of disclosure, the conduct of issuers’ affairs and the market as a whole; and
    • (j) securities should be brought to the market in a way that is appropriate and that will facilitate an open and efficient market for the trading of securities.

    Listings committee

      • 4. (1) The ZSE shall appoint a listings committee consisting of at least three non-executive board members.

(2) The committee may co-opt such number of technical experts as they deem fit for purposes of executing their functions.

(3) The Listings Committee shall undertake the detailed execution of the functions of the ZSE provided for in section 3(1).

(4) Issues of procedures at meetings and quorum will be provided in the procedure manual.

Annual revision of official list

5.(1) All listings must be reviewed and revised by the ZSE annually after receipt by the ZSE of a certificate from each issuer complying with the Eighteenth Schedule (“the certificate”) by not later than the 31st January in each year (“the due date”).

(2) If the certificate is not received by the ZSE on or before the due date—

  • (a) the ZSE must send the issuer a letter of reminder on the next business day following the due date, requesting the issuer to rectify the situation and provide the ZSE with the certificate within 14 days from the date of the reminder, failing which the issuer must make written representations to the ZSE within seven calendar days thereafter as to why the securities should not be suspended and subsequently terminated; and
  • (b) failing compliance within 14 calendar days of despatch of the reminder to the issuer in terms of paragraph (a), the ZSE must publish an announcement in two national newspapers and on the ZSE Data Portal, the cost of which is to be borne by the issuer, informing holders of securities that the issuer has not provided the ZSE with the certificate, and cautioning holders that the listing of the securities concerned are under threat of suspension and possible termination; and
  • (c) the issuer will be invoiced the cost, payable on presentation, of the publication of the press announcement; and
  • (d) if the certificate is not submitted and no representations are received in accordance with paragraph (a), or any representations that are received are unsatisfactory, the listing of the relevant securities will be suspended in terms of section 7 (unilateral suspension) and the suspension will only be lifted upon receipt by the ZSE of the certificate.

Power of censure

6. (1) If the ZSE considers that an issuer has contravened these rules, it may, without derogating from its powers of suspension or termination, censure the issuer by way of a written warning, or by public censure and publication, or both by notification seven days before.

(2) Where the ZSE finds that an issuer or any of an issuer’s directors has contravened these rules, the ZSE may, without derogating from its powers of suspension or termination, do all or any of the following—

  • (a) censure the issuer or the directors by means of private censure;
  • (b) censure the issuer or the directors or both, by means of public censure;
  • (c) disqualify the issuer’s directors from holding office as director of a ZSE-listed company for such period as it may determine;
  • (d) terminate the accreditation of the sponsoring broker and remove the sponsoring broker from the ZSE list of sponsoring brokers; and, where the ZSE takes the action referred to in paragraph (a) or (b), the issuer or the directors concerned, or both, shall be liable for the cost attached to such action.

(3) In the case of wilful or persistent non-compliance with the listings requirements by an issuer’s directors, the ZSE may state publicly that in its opinion the retention of office by the directors concerned is prejudicial to the interests of investors.

(4) Unless the ZSE considers that the maintenance of the smooth operation of the market or the protection of investors otherwise requires, it must give advance notice to the parties involved of any action which it proposes to take and at the same time give them an opportunity to make representations to the ZSE.

Unilateral suspension

7. (1) If in the opinion of the ZSE—

  • (a) it is desirable in the public interest to do so; or
  • (b) an issuer has failed to comply with these rules; or
  • (c) it will further one or more objectives set out in section 4 of the Securities and Exchange Act[Chapter 24:25]; the ZSE may suspend the listing of an issuer’s securities and impose such conditions as it considers appropriate for the lifting of such suspension.

(2)Where the ZSE finds grounds for suspension, it shall notify the issuer of pending suspension to afford the issuer an opportunity to make representations to the ZSE in support of the continued listing of its securities.

(3)Where the ZSE finds no merit in the representations made by the issuer it must suspend the listing unilaterally.

(4) Where an issuer’s listing is suspended and the issuer fails to take action to obtain the restoration thereof within hundred and eighty (180) days, the ZSE may terminate the listing in accordance with section 10 (termination initiated by ZSE).

Suspension on request

8. The ZSE may grant a request for the suspension of any listed securities—

  • (a) where the issuer is placed under provisional liquidation or under corporate rescue or is subject to an application for a scheme of arrangement or reconstruction under the Companies Act; or
  • (b) where a written request is made by the directors of the issuer and it is apparent that there are two levels of information in the market and the ZSE considers that this situation cannot be remedied by the immediate publication of an announcement to clarify the situation; or
  • (c) where the issuer has ceased to do business.

Requirements after suspension

9. Unless the ZSE decides otherwise, an issuer whose securities are suspended must—

  • (a) continue to comply with all the listings requirements applicable to it; and
  • (b) submit to the ZSE at least once every quarter or at such other times as the ZSE may determine, progress reports relating to the state of the affairs of the company and any proposed action by it; and
  • (c) advise shareholders on a quarterly basis about the state of the affairs of the company and any proposed action by the company, including the date on which it expects that the suspension will be lifted.

Termination

Termination initiated by the ZSE

10. (1). Subject to the Securities and Exchange Act [Chapter 24:25] and subsection

(2), the ZSE may remove any securities from the official list if, in its opinion—

    • (a) it is in the public interest to do so; or
    • (b) the issuer has failed to comply with these rules; or
    • (c) the securities were suspended because the issuer was under corporate rescue and it has failed to com  o t of corporate rescue within two years from date of suspension; or
    • (d) the issuer, having been placed under corporate rescue, is put into liquidation; or(e) the issuer fails to comply with the conditions set out in section 9 (requirements after suspension).

(2) When a listing of securities is under threat of termination, the issuer must give notice of pending decision of ZSE to terminate.

Termination on request

11. (1) An issuer shall not apply for the termination of its listing for a period of two years from the day it is listed on the ZSE or from the date of its raising fresh capital from security holders.

(2) Except as provided in subsection(1), an issuer may at any time make a written application to the ZSE for the removal of its securities from the official list, indicating the time and date with effect from which it wishes the removal to be effective and the reasons for the request: Provided that ZSE may grant the request for termination, but the securities may be removed from the official list only if the listed company’s security holders in a general meeting have approved of the removal.

(3)An issuer which has applied for the removal of its securities from the official list must send a circular to its shareholders giving reasons for the proposed termination. The circular must comply with the requirements of section 274 (contents of all circulars).

(4) The ZSE may grant an application for termination if—

  • (a) before making the application to terminate the listing, the company has obtained the security  ’ approval in a general meeting called for that purpose; and
  • (b) the reasons for the termination are stated in the application.

(5)Where shareholders’approval is required, unless the ZSE otherwise decides, a 75 per centum vote of the votes of all shareholders present or represented by proxy at the general meeting, excluding any controlling shareholder, its associates and any party acting in concert, must be cast in favour of the resolution approving the termination.

(6) Shareholders’ approval of the termination of the listing need not be sought and a circular need not be sent to the holders of securities whose listing is intended to be terminated—

  • (a) where, following a take-over, the securities have become subject to sections 191 and 194 of the Companies Act, and notice has been given by the offeror of its intention to cancel the listing of the securities in the initial offer document or any subsequent circular sent to the holders of the securities. Any such subsequent circular must be approved by the ZSE; or
  • (b) upon the completion of any transaction in connection with which a circular has been sent to holders of  he securities containing notice of the intention to terminate the listing of the securities on or after the completion of the transaction, if the date for cancellation of the listing is not less than 30 days after the date of issue of the circular.

Removal from the official list of redeemable preference shares or debentures

12. (1) Written application for the removal of redeemable preference shares or debentures, or the corresponding portion thereof, from the official list as and from the date of the closing of the registers or the date on which the redemption or repayment, as the case may be, took place (if preference shares or debentures are redeemed by drawings) must be made to the ZSE at least 30 calendar days before the date of redemption or repayment.

(2) The application must be accompanied by a copy of the proposed announcement and the circular to be issued to the redeemable preference shareholders or debenture holders notifying them of the redemption or repayment.

Application of fines

13. The whole or part of any fines levied by the ZSE on issuers or their directors must be applied to the meeting of any costs incurred by the ZSE in enforcing these listings requirements.

SUB-PART A SUSPENSION

Power to require information

14.(1)The ZSEmay require an issuer to disclose to it, within a period specified by the ZSE, such information at the company’s disposal as the ZSE may determine. If the ZSE is satisfied, after the company has had anopportunity of making representations to it, that the disclosure of the information to registered holders of the securities in question will be in the public interest, the ZSE may by notice in writing require the company to disclose the information within the period specified in the notice.

(2) The ZSE may require an issuer to publish or disseminate any further information not specified inthese rules in such form and within such period as it considers appropriate. If the company fails to comply with such a requirement the ZSE may itself publish the information, after giving the company an opportunity to make representations in the matter, publish the information, and may recover the cost of publication from the company.

Publication

15. (1) The ZSE may, in its discretion and in such manner as it thinks fit, notify the public or cause the public to be notified that it has done any one or more of the following—

  • (a) investigated dealings in a listed security;
  • (b) censured an issuer;
  • (c) suspended the listing of any security;
  • (d) terminated the listing of any security;
  • (e) imposed a penalty on an issuer;
  • (f) imposed a penalty on an issuer’s directors;
  • (g) advised that in its opinion the retention in office of any of the issuer’s directors, who shall be named, is prejudicial to the interests of investors;
  • (h) omitted the price of any security from its official quotation of prices of securities issued for publication: Provided that where ZSE gives the notification, the cost shall be borne by the issuer.

(2) A notice referred to in subsection (1) must inform the public of the reasons for the ZSE’s action and, in the case of an investigation, of so much of the ZSE’s conclusions or findings as the ZSE may, in its discretion, consider necessary to disclose.

(3) None of the following persons—

  • (a) an issuer; or
  • (b) any director or officer of an issuer; or
  • (c) any holder of securities issued by an issuer, including a nominee of such a holder; or
  • (d) an auditor, financial adviser or reporting accountant of an issuer; has a right of action, for damages or otherwise, against the ZSE or any member or employee of the ZSE arising out of the publication of any statement in terms of subsection (1) unless the publication was grossly negligent or reckless or was done wilfully with the intention of injuring the listed company, its directors or officers or any other claimant, as the case may be.

(4) The ZSE may at any time and in its discretion publish or authorise the proprietor or publisher of any newspaper or periodical to publish any statement made in terms of subsection (1) and (2).

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 III – Sponsoring Brokers

Application of Part

  • (1) This Part sets out the requirements relating to sponsoring brokers. Sponsoring brokers will be persons who are registered as—
    • (a) securities dealers;(b) banks;(c) accountants;(d) legal practitioners;(e) investment advisors; and other professionals as may be approved by the ZSE.

    (2) A sponsoring broker must accept the responsibilities set out in this Part and in the Sixteenth Schedule. The responsibilities of a sponsoring broker appointed by an issuer are—

    • (a) to assist issuers with applications for listing which require the production of listing particulars or other relevant documents; and(b) to provide advice on a continuing basis regarding the application of these rules, including the application of the spirit of the requirements, and the need to uphold the integrity of the ZSE and the continuing obligations set out in this Part. Only those sponsoring brokers on the ZSE’s register of sponsoring brokers may act as sponsoring brokers.

    Sponsoring brokers

    17. An issuer must appoint a sponsoring broker in certain circumstances. Such sponsoring broker must make an undertaking to the ZSE that he or she accepts the responsibilities imposed by these rules.

    If the sponsoring broker fails to carry out those responsibilities, the ZSE may take one or more of the steps referred to in section 28 (action against a sponsoring broker).

    Criteria for registration as sponsoring broker

    18. (1) A sponsoring broker must meet the requirements outlined in the Sixteenth Schedule paragraph 16.1.

    (2) A sponsoring broker must undertake to the ZSE, in the form set out in Sixteenth Schedule, that it accepts the responsibilities of a sponsoring broker and will discharge those responsibilities at all times to the satisfaction of the ZSE. Every sponsoring broker is required to comply with the Code of Conduct for Sponsoring brokers attached to these rules in Sixteenth Schedule.

    (3) The ZSE must maintain a register of all qualifying sponsoring brokers, and no person may act as a sponsoring broker on any transaction unless the person’s name appears on the register of sponsoring brokers.

    Appointment

    19.(1) An issuer must appoint a sponsoring broker when—

    • (a) the issuer makes an application for listing which requires the production of listing particulars; or(b) it wishes to submit documents to the ZSE pertaining to any of the matters detailed in Part XVII (documents to be submitted to the ZSE); or(c) after a breach of the listing requirements, the ZSE notifies the issuer that it should appoint a sponsoring broker to give advice on the application of these rules; or(d) a sponsoring broker is required by these rules to report to the ZSE in relation to any transaction or matter; or(e) the ZSE requires the issuer to do so.

    (2) Where an issuer has appointed a sponsoring broker for a particular transaction, the broker shall notify the ZSE of such appointment.

    Responsibility of a sponsoring broker

    20. (1) The detailed responsibilities of the sponsoring broker which are provided in Sixteenth Schedule emanate from the provisions of sections 16(2). A failure to carry out these responsibilities may result in the ZSE taking one or more of the steps referred to in section 28 (action against a sponsoring broker).

    (2) A sponsoring broker who places reliance on the advice of advisers to the issuer should be satisfied with the credentials and abilities of such advisers.

    (3) The sponsoring broker or, where there is more than one sponsoring broker in accordance with section 26, the lead sponsoring broker, must—

    • (a) for each issuer in respect of which it acts as a sponsoring broker, submit to the ZSE at an early stage, and in any event not later than the date on which any documents in connection with the issuer are submitted to the ZSE, a confirmation in the form set out in Seventeenth Schedule (declaration by sponsoring broker); and(b) provide to the ZSE any information or explanation known to it in such form and within such time as the ZSE may reasonably require for the purpose of verifying whether the listings requirements are being and have been complied with by it or by an issuer; and(c) facilitate all correspondence between the issuer and the ZSE, including submitting minutes of meetings with the issuer and financial advisers; and(d) submit to the ZSE all documents required in terms of Part XVII (documents to be submitted to ZSE) and ensure that any announcements and documents, excluding periodic financial announcements and annual financial statements, comply with these rules both in principle and content. The sponsoring broker must obtain confirmation, preferably in writing, from issuers in respect of periodic financial announcements and annual financial statements that such announcements and statements have been prepared in compliance with these rules. All submissions, together with the required checklist as contained in the Appendix to Part XVII (documents to be submitted to ZSE), must be signed by at least one of the approved executives of the sponsoring broker; and(e) ensure that the issuer is guided and advised as to the application of these rules, and the need to uphold the integrity of the ZSE; and(f) ensure that all documents submitted to the ZSE are correct and complete; and (g) satisfy itself as to the credentials and abilities of the advisers to the issuer on which it places reliance, including those of other appointed sponsoring brokers, banks, corporate advisers, financial advisers, reporting accountants, auditors, competent persons, providers of fair and reasonable statements and specialist advisers, and that they carry out any activities as may be requested by the ZSE; and(h) discharge its responsibilities with due care and skill; and
      • (i) Prior to the submission of any documents that require approval by the ZSE, satisfy itself on the basis of due and careful enquiry from the issuer and its advisers— (i) about the matters described in sections 21 to 25; and(ii) that there are no material matters, other than those disclosed in writing to the ZSE, that should be taken into account by the ZSE in considering the submission.

    (4) The ZSE may on submission by the sponsoring broker of the documents relating to the transaction it considers that a proposed transaction requires persons with particular skills,, direct the sponsoring broker to appoint sponsoring brokers with the requisite qualifications and skills and any changes to the composition of persons within the team of a sponsoring broker must be notified to the ZSE.

    Applications for listings

    21. (1) In the case of any application for listing which requires the production of listing particulars, the sponsoring broker must complete a declaration in the form issued by the ZSE confirming that it has satisfied itself to the best of its knowledge and belief, having made due and careful enquiry of the issuer and its advisers that—

    • (a) all the documents required by the listings requirements to be included in the application for listing have been submitted to the ZSE; and(b) all other relevant requirements of these rules have been complied with; and(c) there are no matters, other than those disclosed in the listing particulars or otherwise in writing to the ZSE, which should be taken into account by the ZSE in considering the suitability for listing of the securities for which application is being made.

    (2) In relation to any application for listing which requires the production of listing particulars, the sponsoring broker is responsible for—

    • (a) all communication with the ZSE; and(b) the lodging with the ZSE of all documents supporting the application; and(c) seeking the ZSE’s approval of listing particulars.

    Directors

    22. The sponsoring broker must be satisfied, before any application for listing is made which requires the production of listing particulars, that the directors of the issuer—

    • (a) have completed and submitted the directors’ declaration as set out in Twenty-first Schedule; and(b) have had explained to them by the sponsoring broker or other appropriate professional adviser the nature of their responsibilities and obligations as directors of an issuer under these rules; and(c) understand what is required of them to enable holders of the issuer’s listed securities and the public to appraise the position of the issuer and to avoid the creation of a false market in its securities once they are listed.

    Financial reporting procedures

    23. In the case of a new applicant, the sponsoring broker must, before the application for listing is made, report to the ZSE in writing that it has obtained written confirmation from the issuer or its advisers that the directors have established procedures which provide a reasonable basis for them to make proper judgments as to the financial position and prospects to the issuer and its group of companies and that this confirmation has been given after due and careful enquiry by the issuer.

    Profit forecast

    24. Where a profit forecast appears in listing particulars, a Category 1 circular or any circular containing proposals to be put to shareholders in general meeting concerning a refinancing or reconstruction of the issuer or its group of companies, the sponsoring broker must report in writing to the ZSE that it has made due and careful enquiry of the issuer and its advisers that the forecast or estimate has been properly made.

    Working capital statement

    25. Where an issuer prepares listing particulars, or any circular or communication to holders of securities that requires a working capital statement, the sponsoring broker must comply with all its responsibilities set out in the Twenty-fourth Schedule.

    More than one sponsoring broker

    26. Where an issuer has appointed more than one sponsoring broker, the issuer must appoint one of them as the lead sponsoring broker. The lead sponsoring broker must always be identified as such in all communications with holders of securities and the public.

    Direct access 27.

    (1) A sponsoring broker must be present at all formal meetings between the ZSE and an issuer at which matters relating to the issuer are discussed where the sponsoring broker has been appointed for that particular matter.

    (2) Notwithstanding this section, the ZSE may, in appropriate circumstances, communicate directly with the issuer or with any other sponsoring broker of the issuer, in addition to its sponsoring broker, on matters of principle which may arise prior to the submission of draft documents or on the interpretation of these rules. Where discussions take place without the involvement of the sponsoring broker, the issuer or the issuer’s adviser must inform the sponsoring broker about the matters discussed as soon as practicable.

    (3) No information concerning meetings referred to in this section may be released through the press without the prior consent of the ZSE.

    Action against a sponsoring broker

    28.(1) Where a sponsoring broker is in breach of its responsibilities or fails to comply with any requirement set out in this Part such sponsoring broker shall be liable to a civil penalty as prescribed in the Twenty-sixth Schedule.

    (2) In addition to the penalty outlined in subsection (1), the ZSE may—

    • (a) censure the sponsoring broker; or(b) remove the sponsoring broker from the Register of Sponsoring Brokers; and may publish or cause to be published, by whatever means it considers appropriate, the action it has taken and the reasons for that action.

    (3) ZSE will consider any breach of responsibilities by a sponsoring broker before referring the breach to the Board of the ZSE.

    (4) Before taking any of the steps described in subsections (1) and (2), the ZSE must—

    • (a) give the sponsoring broker reasonable notice of the ZSE’s proposed action; and(b) afford the sponsoring broker a reasonable opportunity to make representations to the ZSE, in writing or in person, or both.

    (5) After making a decision in terms of subsections (1) and (2), the ZSE must advise the sponsoring broker of the ZSE’s decision as soon as practicable after it is made, and of the reasons for the decision where it is unfavourable to the sponsoring broker.

    Responsibilities of sponsoring brokers

    29. The requirements relating to the registration of sponsoring brokers is an integral part of the regulation of the ZSE and it is essential that sponsoring brokers should assist the ZSE in upholding the integrity of the market.

PART IV – Continuing Obligations

Application of Part

  • 30. (1)This Part sets out the authority of the ZSE regarding its powers to list, suspend, and terminate listings and its powers to enforce these rules and other related matters. It also sets out certain of the continuing obligations which an issuer is required to observe once any of its securities have been admitted to listing.(2) This Part does not apply to issuers of specialist securities except where issuers are specifically referred to in this Part and as indicated in the continuing obligations in section 386 of Part XIX.

    Appointment of sponsoring broker

    31. An issuer must appoint a sponsoring broker and all correspondence with the ZSE must be directed through the sponsoring broker, subject to direct access as stated in section 27.

    SUB-PART A: GENERAL OBLIGATION OF DISCLOSURE OF ISSUER

    Material price sensitive information

    32: (1) Subject to approval by the ZSE, and with the exception of trading statements, an issuer must, without delay, unless the information is kept confidential for a limited period of time in terms of section 33 (3), release an announcement providing details of—

    • (a) any circumstance or event that is or is likely to have a material effect, whether positive or negative, on the financial results, financial position or cash flow of the issuer or any of its material subsidiaries;(b) any new development in such issuer’s sphere of activity that is not public knowledge and may, by virtue of the effect of that development on its financial results, financial position or cash flow or on the general course of its business, lead to material movements of the reference price of the issuer’s listed securities; and(c) any information necessary to enable holders of the issuer’s securities and the public to avoid the creation of a false market in such issuer’s listed securities.

    (2) Issuers must publish a profit warning statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial results for the period next to be reported upon will differ by at least 20 per centum from the most recent of base information which is—

    • (a) the financial results for the previous corresponding period;(b) a profit forecast in terms of Part IX (financial information) previously provided to the market in relation to such period.

    (3) Issuers may publish a trading statement if the differences referred to in subsection (2) are less than 20 per centum but are considered by the issuer important enough to be made the subject of a trading statement.

    (4) The determination of a reasonable degree of certainty in terms of subsection (2) is a matter of judgement which has to be taken by the issuer and its directors and is one in which the ZSE does not involve itself. This determination may differ from issuer to issuer depending on the nature of the business and the factors to which they are exposed.

    (5) Trading statements must provide specific guidance by the inclusion of a specific number or percentage to describe the differences.

    (6) In the event of an issuer publishing a trading statement in subsection (3), the issuer must include a statement (which is not deemed to be a cautionary statement and which does not give rise to the commencement of a closed period) in the trading statement advising securities holders that the forecast financial information has not been reviewed and reported upon by the issuer’s auditors.

    (7) The profit warning and trading statements shall be published at least 21 days before publication of results. Where an issuer ––

    • (a) publishes information without ZSE approval; or(b) publishes misleading information; or(c) makes late notification or disclosure of material information as required under subsection(1), it shall be liable to the fines outlined in Twenty–sixth Schedule.

    (8) Except where otherwise expressly provided, the provisions of this section are in addition to any specific requirements regarding obligations of disclosure contained in these rules.

    Confidentiality

    33. (1) Information that must be published according to section 32 (material price sensitive information) may not be given to a third party before it has been published except as permitted by subsection (3) to (6), or released (even subject to a time embargo) to any third party—

    • (a) during ZSE trading hours, until the information has been published; or(b) outside ZSE trading hours, until the information has been authenticated and, approved, and arrangements have been made for the information to be published before the next business day’s opening of ZSE trading hours; and(c) any such information which is to be released during analysts’ briefings must first be submitted to the ZSE in accordance with Nineteenth Schedule (corporate action and other regulatory information submission).

    (2) Where information referred to in subsection (1) is released to a printer for printing prior to publication, the issuer must ensure the printer signs a confidentiality agreement with the issuer by prohibiting the disclosure of the information before its publication in terms of these rules.

    (3) An issuer may give information in strict confidence to its sponsoring broker or advisers and to persons with whom it is negotiating with a view to effecting a transaction or raising finance. These persons may include prospective underwriters of an issue of securities, providers of funds or loans or the place of the balance of a rights issue not taken up by shareholders. In such cases, the issuer must advise, in writing, the recipients of such information that it is confidential and that they must not deal in the company’s securities before the relevant information has been made available to the public.

    (4) Information required by and provided in confidence to, and for the purposes of, a government department, the Reserve Bank of Zimbabwe, the Competition and Tariff Commission, the Securities and Exchange Commission, the Zimbabwe Revenue Authority or any other statutory or regulatory body or authority need not be published.

    (5) Where information relates to a proposal by the issuer which is subject to negotiations with employees or trade union representatives, the issuer may defer publication of the information until an agreement has been reached on the implementation of the proposal.

    (6) Where it is proposed to announce at any meeting of holders of listed securities information which might have a material effect on the ruling price of the listed company’s securities, arrangements must be made for the publication of that information simultaneously with the publication by way of press announcements as soon as possible after the announcement at the meeting is made. If any price-sensitive information is disclosed in an unplanned manner during the course of a meeting of holders of listed securities, immediate steps must be taken for the making of an appropriate announce­ment containing such price sensitive information.

    (7) If ––

    • (a) an issuer has any material price-sensitive information which could lead to material movements in the ruling price of its securities; and(b) the necessary degree of confidentiality regarding the information cannot be maintained or that confidentiality has or may have been breached; the issuer must publish the information, by way of a cautionary announcement complying with Part XII, as soon as possible.

    (8) An issuer must submit a copy of a cautionary announcement to the ZSE for approval in the form prescribed in the Twentieth Schedule (corporate action and other regulatory information submission). Once such approval has been obtained, the issuer must publish the cautionary announcement in compliance with Part XII by way of a press announcement in two daily newspapers and a copy of the same cautionary statement must also be submitted to the ZSE for publication on the ZSE Data Portal.

    (9) An issuer that has published a cautionary announcement must publish updates in terms of Part XII.

    (10) Where an issuer fails to publish updates as stated in subsection (9), it shall be liable to a fine prescribed in Twenty-sixth Schedule.

    (11) If the directors of an issuer consider that disclosure to the public of information required to be published in terms of section 32 (material price sensitive information) might prejudice the listed company’s legitimate interests, the ZSE may grant a dispensation from that requirement.

    SUB-PART B: DISCLOSURE OF PERIODIC FINANCIAL INFORMATION

    Dividends and interest

    34. (1) Announcements of dividends or interest payments on listed securities should be notified to the holders of the relevant securities five days upon declaration by means of a press announcement.

    (2) An electronic copy of the press announcement must be delivered to the ZSE in accordance with the Nineteenth Schedule at least 14 days prior to the last day to register.

    (3) Where dividends or interest payments are announced otherwise than by way of a press announcement, the ZSE must be notified in writing of the dividend or interest payment on the same day that holders of the relevant security are notified.

    (4) The announcement referred to in subsection (3) must contain the following information—

    • (a) the last day to register;(b) the date on which the dividend or interest will be paid; and(c) the cash amount that will be paid for the dividend or interest.

    (5) Where a scrip dividend is declared, the information required to be announced is set out in section 125.

    (6) Notification of non-declaration of dividends or payment of interest must be published in the interim or preliminary report or in the annual financial statements or by way of a press announcement.

    (7) If an issuer decides not to declare distribution payments because such decision is deemed to be price-sensitive, the decision must be announced immediately after it is taken.

    (8) An issuer that wishes to declare a final dividend prior to the publication of the annual financial statements or preliminary report must ensure that the dividend notice given to shareholders contains—

    • (a) a statement of the ascertained or estimated consolidated profits before taxation of the listed company and its subsidiaries for the year; and(b) the particulars of any amounts appropriated from reserves, capital profits, accumulated profits of past years or other special sources to provide wholly or partly for the dividend.

    (9) At least 14 days’ notice must be given to shareholders and the ZSE prior to the last day to register for the dividend or interest.

    (10) The last day to register should be a Friday, or if that day is a public holiday, the previous business day.

    (11) Unless there is just cause, payment of dividend or interest must be effected within 42 days after the last day to register, failure to which the issuer shall be liable to a penalty in terms of the Twenty-sixth Schedule (fines and penalty charges on listed companies).

    (12) Where a dividend or interest declaration is expressed as a percentage, the monetary equivalent must be shown in parenthesis.

    (13) Where there is a late declaration of a dividend by the issuer, the issuer must notify the ZSE in order to propose a new timeframe which requires ZSE’s approval.

    (14) Where an issuer makes a late declaration or declarations have been notified without complying with this section, it shall be liable to a fine prescribed in the Twenty-sixth Schedule.

    SUB-PART C: INTERIM AND PRELIMINARY REPORTS

    Interim reports

    35. (1) The issuer must publish half-year interim reports in the press or in electronic form, and be distributed to all shareholders after the expiration of the first six-months of the financial year and not later than 3 months after that date.

    (2) The issuer will be liable to a fine in accordance with Twenty-sixth Schedule for failure to publish the results within the period stipulated in subsection (1).

    (3) Where the financial period covers 15 months or longer, interim reports must be published in the press in respect of the first and second six months of this period.

    (4) Interim reports must comply with the IFRS for Interim Reporting, or any other framework prescribed by the ZAPB and with Part IX (Financial information).

    (5) Within 45 days after the end of the first and third quarters of each financial year, issuers must publish their interim reports on their websites and submit the reports to the ZSE for publication on the ZSE Data Portal.

    (6) Where an issuer fails to publish the results in terms of subsection (5), the issuer shall be liable to a penalty prescribed in Twenty-sixth Schedule which shall be payable within 30 days from the due date.

    Preliminary reports

    36. (1) If an issuer has not distributed annual financial statements to all shareholders within three months after its financial year-end, it must publish in the press and distribute to all shareholders a preliminary report, in accordance with the times prescribed in section 35, even if the information is unaudited.

    (2) The preliminary report must disclose the reason why the company has failed to distribute the annual financial statements within three months after its financial year-end.

    (3) Where the preliminary report has been audited, the announcement must state that the signed audit report is available for inspection at the company’s registered office.

    (4) Although the audit report need not be included in the preliminary report, if the audit report is modified, details of the nature of such modification must be stated in the preliminary report, and the name of the auditor as well as a summary of the auditor’s opinion must be included in all abridged annual financial statements.

    Procedure for non-compliance of publishing interim financial statements

    37. (1) Where an issuer fails to publish interim financial statements by the day following the due date of issue of the listed company’s interim or preliminary report, the issuer will be granted a period of one month from the due date to issue its interim or preliminary report, failing which the company’s listing will be suspended in terms of section 7 (unilateral suspension).

    (2) Failing compliance within the time stated in subsection (1), the ZSE will publish a press announcement informing shareholders that the listed company has not issued its interim or preliminary report and cautioning security holders that the listing of the company’s securities are under risk of suspension and possible termination.

    (3) On the date of publication of the announcement in terms of subsection (2), the issuer’s listing will be annotated on the ZSE Data Portal to indicate that it has failed to submit its interim, final or preliminary report on time.

    (4) The issuer will be invoiced the cost of publication of the press announcement and all reasonable related costs, and must pay the bill on presentation.

    (5) Where the listing is suspended, the lifting of the suspension will only be effected upon—

    • (a) receipt by the ZSE of the listed company’s interim or preliminary report;(b) the ZSE being satisfied that the interim or preliminary report complies with IFRS; (c) the payment of the costs referred to in subsection (4); and (d) the listed company publishing the results.

    (6) When an issuer’s listing is suspended and the issuer fails to take action to obtain the restoration thereof within 180 days, the ZSE may terminate the listing.

    (7) An issuer is liable to a penalty prescribed in the Twenty-sixth Schedule.

    Requirement for review by auditors

    38.(1) All unaudited—

    • (a) half-year interim reports; and(b) preliminary reports; must be reviewed by the listed company’s external auditors.

    (2) When conducting a review of an unaudited interim or preliminary report, the auditor must follow the guidelines issued by the PAAB.

    (3) The name of the auditor must be stated in the published interim or preliminary report.

    (4) Although the auditor’s report need not be included in the published interim or preliminary report, details of the nature of any qualification of or disagreement over the report must be stated in the report.

    (5) If the auditor’s report is not included in the published interim or preliminary report, the latter must state that the auditor’s report is available for inspection at the issuer’s registered office.

    (6) If during the course of a review of a preliminary report, the auditor becomes aware of any unresolved matter which could result in the qualification of the auditor’s report on the annual financial statements for the period under review, that fact must be stated in the preliminary report.

    (7) Where the financial period covers more than 12 months and interim reports are distributed in accordance with section 35, the listed company must obtain a review opinion for the second six-month period.

    Annual financial statements

    39. (1) Audited annual financial statements must be published not more than three months after the end of every issuer’s financial year.

    (2) All listed companies must, within six months after the end of each financial year, distribute the annual financial statements to all shareholders at least 21 days before the date of the annual general meeting and submit copies to the ZSE in accordance with Part XVII (documents to be submitted to ZSE)—

    • (a) a notice of annual general meeting; and(b) the annual financial statements for the relevant financial year as reported upon by the company’s auditors.

    (3) Where annual financial statements have not been published to holders of its securities within three months of its financial year end, an issuer must distribute and publish a preliminary report as provided in section 36.

    (4) An issuer’s annual financial statements must be distributed to the issuer’s holders of securities and an electronic copy of the statements, in a prescribed form, must be submitted to the ZSE.

    (5) An issuer must publish an abridged report of its annual financial statements referred to in subsection (1).

    (6) A summary of the audit report must be included in the abridged report and, if the audit report is modified, details of the nature of such modification must be stated in the abridged report.

    (7) Any annual financial information published voluntarily by an issuer in advance of being required to do so in terms of section 32 (material price sensitive information) must—

    • (a) at least be reviewed by the issuer’s auditors; and(b) comply with Part IX (Financial information) in respect of disclosure; and(c) state the name of the auditors in the preliminary report.

    (8) Although the review or audit report need not be included in the preliminary report, if such report is modified, details of the nature of such modification must also be stated in the preliminary report.

    (9) If the review or audit report is not included in the preliminary report, it must state that the review or audit report is available for inspection at the issuer’s registered office.

    (10) If an issuer has published a preliminary report, then on the date of issue of its annual financial statements, the issuer must comply with subsection (4) or publish an announcement stating that it has issued its annual financial statements and that it is not publishing an abridged report as the information previously published in the preliminary report is unchanged.

    Procedure for non-compliance under annual financial statements

    40. (1) Where an issuer has failed to comply with section 39—

    • (a) the ZSE must, five months after the listed company’s financial year end, send the listed company a letter of reminder by post or electronic means, as determined by the ZSE, advising that it still has one month within which to submit its annual financial statements, failing which its listing may be suspended until such time as the annual financial statements have been submitted;(b) the company’s listing must be annotated on the ZSE Data Portal, three months after its financial year end, to indicate that it has failed to submit its annual financial statements on time;(c) the ZSE must, six months after the company’s financial year end, publish a press announcement informing shareholders that the listed company has not submitted its annual financial statements, and cautioning shareholders that the listing of the company’s shares is at risk of suspension and possible termination;(d) the issuer’s listing must be suspended by the ZSE if it has not complied with the reminder sent in terms of paragraph (a) by the end of the seventh month after its financial year end, and thereafter the ZSE will consider the continued suspension or termination of the company’s listing;(e) the issuer must bear the cost of publication of the announcement referred to in paragraph (c), including any reasonable costs related to such publication;(f) the company’s suspension will be lifted upon receipt by the ZSE of the issuer’s annual financial statements and upon the ZSE being satisfied that the annual financial statements comply with the accounting standards issued by the Zimbabwe Accounting Practices Board and upon payment of the costs referred to in paragraph (e); and (g) the company will be liable to a fine in accordance with Twenty-sixth Schedule(fines and penalties for listed companies) for failure to publish the results within the stipulated period, even if it has complied with the reminder sent in terms of paragraph (a).

    (2) The ZSE retains the discretion to waive the automatic suspension of a company’s listing where it has not submitted its annual financial statements on time.

    Modified auditor’s opinion

    41. (1) Where a modified auditors’ report has been issued on an issuer’s annual financial statements and contains an emphasis of matter, this will be announced through the ZSE Data Portal.

    (2) If an issuer’s financial statements have been the subject of an audit qualification or disclaimer—

    • (a) an announcement of that fact will be made through the ZSE Data Portal and published in the press by the ZSE, at the issuer’s cost, informing holders of the issuer’s securities that the auditors’ opinion has been qualified; and(b) a special meeting of the ZSE will be convened within 21 days after receipt of such financial statements, to consider the issuer’s continued listing, or the suspension and termination of the issuer’s listing; and(c) the issuer’s listing will be annotated on the ZSE Data Portal indicating an audit qualification.

    (3) Where the auditors express an adverse opinion on the annual financial statements of an issuer, an announcement of the fact will be made through the ZSE Data Portal and published in the press by the ZSE, at cost to the issuer, informing holders of securities that an adverse auditors’ opinion has been expressed.

    (4) Where the auditors disclaim an opinion on the annual financial statements of an issuer—

    • (a) an announcement of the fact will be made through the ZSE Data Portal; and(b) a special meeting of the ZSE will be convened within 21 days after receipt of such annual financial statements, to consider the issuer’s continued listing, or the suspension and termination of the issuer’s listing; and(c) the ZSE must publish an announcement informing holders of the issuer’s securities of all decisions resulting from the special meeting referred to in paragraph (a).

    Notification relating to capital

    42. Unless otherwise indicated, an issuer must, without delay, publish a press announcement containing details of the following information relating to its capital—

    • (a) any proposed change in its capital structure (for example any increase in the level of authorised or issued securities), other than allotments of new shares in terms of Part VI: Provided that the announcement may be delayed while marketing or underwriting is in progress;(b) any proposed change in the rights attaching to any class of listed securities or to any securities into which any listed securities are convertible;(c) the basis of allotment of listed securities offered generally to the public for cash or claw-back offers to shareholders and, in the case of public offers, an additional press announcement must appear before dealings commence;(d) any extension of time granted for the currency of temporary documents of title;(e) the effect, if any, of any issue of further securities on the terms of the exercise of rights under options and convertible securities; and(f) the results of any new issue of listed securities or of a public offering of existing securities: Provided that the issuer may, at its discretion, delay such publication until the obligation by the underwriter to take or procure others to take securities is finally determined or lapses.

    Cash companies

    43. (1) If within six months after the ZSE has classified it as a cash company, a cash company fails to enter into an agreement and make an announcement relating to the acquisition of viable assets that satisfy the conditions for listing set out in Part V, its listing will be suspended.

    (2) If a cash company fails to obtain the ZSE’s approval, within three months from the date of its suspension, of a circular relating to the acquisition by it of viable assets that satisfy the conditions for listing set out in Part V, the cash company’s listing will be terminated.

    (3) Where a cash company is to be utilised for the reversal of assets to itself—

    • (a) it must comply with the requirements for bringing a company to listing; and(b) the company as reconstituted must meet the conditions for listing as set out in Part V.

    (4) Cash company’s investment shall acquire no less than 10 per centum of equity of the company holding the viable asset and it must be eligible for prescribed asset status.

    SUB-PART D: RIGHTS BETWEEN HOLDERS OF SECURITIES

    Equality of treatment

    44. (1) An issuer must ensure that all holders of any class of its securities receive fair and equal treatment.

    (2) An issuer may not issue any securities with voting rights differing from other securities of the same class.

    Pre-emptive rights

    45. (1) Securities in each class for which listing is applied must rank pari-passu in respect of all rights, that is to say, the securities—

    • (a) must be identical in all respects;(b) must be of the same nominal value and the same amount per share must have been paid up;(c) must carry the same rights as to unrestricted transfer, attendance and voting at general meetings and in all other respects; and(d) must be entitled to dividends at the same rate and for the same period so that at the next distribution, the dividend payable on each share will be the same amount.

    (2) Unless the security holders concerned otherwise permit, an issuer proposing to issue equity securities for cash must first offer those securities by a rights offer to existing equity shareholders in proportion to their existing holdings.

    (3) Only to the extent that the securities are not taken up by existing equity shareholders in terms of the offer may they be issued for cash to others or otherwise than in the proportion mentioned in subsection (1).

    Waiver of pre-emptive rights

    46. (1) To the extent that security holders of an issuer give their authorisation by ordinary resolution, issues of equity securities for cash made otherwise than to existing shareholders in proportion to their existing holdings will, subject to Part V (conditions for listing), be permitted for a fixed period in accordance with that authority.

    (2) In exceptional circumstances, such as rescue operations, the ZSE may in its discretion allow a waiver of shareholders’ pre-emptive rights that does not comply with subsection (1) if satisfied that the conditions listed in the Twenty-eighth Schedule exist but the ZSE may require the publication of such information relating to the waiver as it may consider appropriate.

    Profit warranties

    47. (1) Where securities are the subject of a profit warranty, such securities may only be conditionally allotted and issued and must be held by an independent third party in trust, pending fulfilment of the conditions of the warranty. The conditions of the profit warranty will only be regarded as having been met once the profit required has been achieved in terms of the profit warranty agreements and the issuer’s auditors have confirmed in writing to the ZSE that the conditions have been met for the securities to be allotted and issued.

    (2) Where the conditions of a profit warranty are not met—

    • (a) the conditional allotment and issue of the securities that were subject to such unfulfilled conditions are of no further force or effect; and(b) no cash compensation may be made for the profit warranty to be achieved.

    Issues by major subsidiary other than on listing

    48. (1) For the purposes of this section, a subsidiary company will be regarded as a major subsidiary if it represents 25 per centum or more of the aggregate of—

    • (a) the share capital and reserves, excluding any minority interests, unrealised reserves not supported by a valuation prepared in the last six months by an independent professional expert acceptable to the ZSE, and intangible assets; or(b) the profits, after deducting all charges except taxation and excluding extraordinary items; of the issuer’s group.

    (2) An issuer must obtain the consent of its shareholders, determined in accordance with Part VI (methods and procedures of bringing securities to listing) and categorized in terms of Part XI (transactions with related parties), before any major subsidiary of the listed company makes any issue for cash of equity securities so as to materially dilute the listed company’s percentage interest in the equity securities of that subsidiary.

    (3) The obligation to obtain the consent of shareholders in subsection (2) does not apply if the major subsidiary is itself listed, but in that case—

    • (a) the major subsidiary must comply with subsection (1);(b) the listed company must ensure that its equity interests in the major subsidiary are not materially diluted through any new cash issue by such subsidiary of equity securities unless such dilution is necessary for the listed subsidiary to satisfy the minimum spread requirements; and(c) in the case of a rights issue, if the listed company does not propose to take up its rights, an arrangement must be made for the rights to be offered first to its shareholders so that they can avoid a material dilution in their effective percentage equity interests.

    (4) The obligation to obtain the consent of shareholders in subsection (2) does not apply if the major subsidiary is unlisted and the issue takes the form of a rights issue to shareholders including the issuer. If the issuer does not propose to take up its rights, an arrangement must be made for the rights to be offered first to its shareholders so that they can avoid a material dilution of their effective percentage equity interests.

    Options for cash

    49. (1) Where options over securities, excluding executive and staff share schemes, are granted for cash, such options must be issued to all shareholders on the share register as on the business day immediately prior to the date of the grant of the listing in proportion to their shareholding in the listed company. Where this procedure is not to be adopted, the ZSEs consent should be obtained.

    (2) The total number of options granted or issued may not, except in the case of a mineral company as defined in Part XIII, exceed 20 per centum of the listed company’s issued capital unless offered to all shareholders in proportion to their existing shareholdings.

    Shareholder spread

    50. (1) All listed companies are required to ensure that a minimum percentage of each class of securities is held by the public as provided in section 87 (main board listing criteria).

    (2) If the percentage of a class of securities held by the public does not comply with the minimum spread requirements, the ZSE may suspend or terminate the listing of a company in accordance with Part II (authority of the ZSE) and allow the company a period of 90 days to restore the percentage, unless that is precluded by the need to maintain the smooth operation of the market or in order to protect investors.

    (3) A listing will not generally be granted to any issue of securities that would reduce the percentage level of securities held by the public.

    (4) If an issuer does not comply with the minimum spread requirements, any application to list new securities will be granted only if, as a result of the issue, the minimum spread requirements will be achieved as far as possible having regard to the size of the issue.

    (5) The ZSE may, in its discretion, allow a reduction in the minimum spread requirements if it considers that such a reduction is in the best interests of the issuer and does not unduly prejudice investors, for example in a rescue situation, provided that an acceptable plan to regularise the position is submitted to the ZSE.

    Notification

    51. (1) An issuer must inform the ZSE, in writing, within seven business days of it becoming aware that the proportion of any class of listed securities in the hands of the public has fallen below the minimum spread requirements.

    (2) An issuer must, in regard to its securities held by the public, disclose in its annual financial statements—

    • (a) the number of members of the general public who hold securities in each class of its listed securities;(b) the percentages of each class of securities held by members of the general public and other persons; and(c) an analysis, in accordance with the categories set out in section 86 (1) to (3), of the disclosure for non-public securities holders.

    SUB-PART E: COMMUNICATION WITH SECURITY HOLDERS

    Prescribed information to be given to security holders

    52. (1) An issuer must ensure that all the necessary facilities and information are available to enable holders of securities to exercise their rights and must, in particular—

    • (a) inform holders of securities of the holding of meetings which they are entitled to attend;(b) enable the holders of securities to exercise their rights to vote, where applicable; and(c) publish notices in the press or distribute circulars in terms of the these rules.

    (2) Where an issuer desires to distribute annual financial statements, circulars, notices of meetings of securities holders and proxy forms to holders of securities in electronic form, the issuer must amend its constitutive documents accordingly and obtain approval of the amendments from the holders of the securities.

    ZSE Data Portal

    53. All announcements that must be made in accordance with these rules must be submitted to the ZSE for publication on the ZSE Data Portal.

    Submissions must be made in accordance with the Nineteenth Schedule (corporate actions and other regulatory information submission).

    Such announcements must also be published in at least two national newspapers.

    SUB-PART F: PUBLICATION

    Press Announcements

    54. (1) All press announcements must be published in English in two national English language newspapers. Prior to publication, announcements must be submitted to the ZSE for approval in accordance with Nineteenth Schedule.

    (2) Issuers must ensure that their press announcements are afforded proper regional coverage in accordance with the geographical spread of security holders.

    Requirements for Circulars and pre-listing statements

    55. (1) Circulars and pre-listing statements must be printed in English and distributed to all security holders.

    (2) Where the ZSE considers it necessary, circulars printed in English may be translated into other officially recognised languages.

    Transfer or receiving and certification office for other securities exchange

    56. (1) All issuers must maintain a transfer or receiving and certification office in Harare or Bulawayo. Certification must be completed within 24 hours of receipt of transfer documents by the transfer office.

    (2) An issuer that has, on application, been granted permission to list its securities on another exchange must ensure that the securities will be accepted for transfer without delay if presented in any of the centres in which they are listed.

    (3) An issuer must obtain approval from its security holders and from the Exchange Control authorities where applicable to list securities on another securities exchange.

    Proxy forms

    57. A proxy form must be sent, together with the notice convening a meeting of holders of listed securities, to each person entitled to vote at any meeting of the holders of listed securities.

    Other classes of securities

    58. If a circular or listing particulars or a press announcement is dispatched to the holders of any particular class of security, the issuer must dispatch a copy or summary of such document to the holders of all other listed securities in the issuer unless the contents of the document are irrelevant to them.

    Communications with holders of bearer securities

    59. If there is a need to communicate with holders of listed bearer securities, the issuer must publish a press announcement referring to the communication and giving an address or addresses from which copies of the communication can be obtained. Documents of title 60. The issuer must ensure that share certificates, electronic certificates and all other documents of title emanating from issuers must be sent by courier or by any other reliable means available, unless the documents exist in electronic form in which case they may be sent electronically to the owners thereof.

    Temporary documents of title

    61. (1) Listed companies must not introduce temporary documents of title without the approval of the ZSE, which approval shall be given upon their furnishing such information and documents as the ZSE may require.

    (2) Issuers which have received approval in terms of subsection (1) may not place a time-limit on their acceptance of any temporary documents of title for the purpose of issuing definitive certificates.

    (3) Issuers which have received approval in terms of subsection (1) must—

    • (a) immediately, as soon as they are in a position to do so, cancel the share certificates or electronic certificates lodged with or issued by them, against which a temporary document of title has been issued; and(b) issue definitive share or electronic certificates within 21 days after presentation to them of the temporary documents of title duly signed and completed by the transferees.

    (4) No listed company may charge for the registration or transfer of its securities in Zimbabwe.

    Receipts

    62. An issuer must issue receipts for all securities lodged with it.

    SUB-PART G: MISCELLANEOUS OBLIGATIONS

    Redemption of listed redeemable securities

    63. (1) A redemption of listed redeemable securities must be authorised and conducted in accordance with the listed company’s constitutive documents and the provisions of the Companies Act [Chapter 24:03].

    (2) Unless the requirement of section 295(2) is waived, the issuer must send a circular containing the information set out in Part XII to holders of redeemable securities which must be redeemed.

    (3) An issuer which is redeeming securities in accordance with subsections (1) and (2) must submit a written application to the ZSE for removal from the List of the securities to be redeemed as from a specified time and date.

    Transfer from one section of the list to another section

    64. (1) An issuer that wishes to be transferred from one section of the List to another section must submit a written application to the ZSE, stating the reasons for the proposed transfer.

    (2) An application referred to in subsection (1) must give details, expressed in value and on a percentage basis, of the assets employed in and income derived from its activities and those of its subsidiaries.

    (3) The application referred to in subsection (1) must be accompanied by a directors’ resolution authorising such transfer.

    Listing and other fees

    65. An issuer must pay the listing and other fees, including the annual charge for listing, as set out in Part XVIII, as soon as such payments become due and payable.

    Directors

    66. (1) If there are any changes to the composition of an issuer’s board of directors and executive management team, including—

    • (a) the appointment of a new director, company secretary or chief financial officer or other person of similar responsibility;(b) the resignation, removal or retirement of a director; and(c) changes to any important functions or executive responsibilities of a director; the listed company must notify the ZSE, through a sponsoring broker, of such changes without delay and in any case not later than the end of the business day after obtaining knowledge of any such changes.

    (2) The changes referred to in subsection (1) must be announced as soon as practicable and must be included in the company’s next publication of listing particulars, quarterly trading updates, interim report or annual financial statements. No such notification is required where a director retires and is re-appointed by a shareholders’ general meeting.

    (3) All directors, other than executive directors, must retire by rotation at least once in every three years or as provided in the company’s articles. No more than 40 per centum of the directors may be appointed as executive directors.

    (4) The notification required by subsection (1) must state the effective date of the change if it is not with immediate effect. If the effective date is not yet known or has not yet been determined, the notification should state this fact, and the company must notify the ZSE when the effective date has become known.

    (5) An issuer must, in respect of any new director, submit to the ZSE a director’s declaration in the form specified in Twenty-first Schedule within 14 calendar days prior to the director’s appointment becoming effective.

    (6) All directors of issuers must comply with these rules.

    Dealing in securities: directors and employees of listed companies

    67. (1) For the purposes of subsection (2), a reference to a director includes the company secretary, senior management and any other member of staff who has knowledge of the company’s performance or is involved in the preparation of the company’s financial results.

    (2) In respect of securities relating to itself, an issuer must submit to the ZSE—

    • (a) details of all transactions, including off-market transactions, by or on behalf of—
      • (i) a director or employee of the issuer, where the securities are held beneficially, whether directly or indirectly;(ii) a director or employee of a major subsidiary of the issuer, where the securities are held beneficially, whether directly or indirectly;(iii) any associate of a director or employee referred to in subparagraph (i) or (ii); or(iv) any independent entity, in terms of which any party referred to in subparagraphs (i) to (iii) may derive any beneficial or non-beneficial interest; and

      (b) a notice containing the information in paragraph (a) and the following information—

      • (i) the date on which the transaction was effected;(ii) the price, amount and class of securities concerned;(iii) the name of the director or employee;(iv) the name of the company of which the person concerned is a director or employee;(v) in the case of options or any other similar right or obligation, the option strike price, strike dates and periods of exercise or vesting;(vi) the nature of the transaction;(vii) the nature and extent of the director’s interest in the transaction; and(viii) confirmation that clearance has been given in terms of section 68(2).

    (3) Any notification required by subsection (1) must be submitted without delay and in any event not later than the end of business on the day following the receipt of the information by the issuer.

    (4) An issuer must require each of its directors to disclose to it, insofar as that information is known to the director or could with reasonable diligence be ascertained by the director, all information which the company needs in order to comply with this section.

    (5) The directors and employees are required to disclose to the company secretary of the issuer all information that the issuer needs to comply with subsection (2) and the issuer must advise each of its directors of their obligations to disclose all such information.

    Any director or employee who deals in securities relating to the issuer must disclose to the issuer the information required by subsection (2) without delay, and in any event by no later than 24 hours after the dealing.

    The issuer must in turn announce such information without delay and in any event by no later than 24 hours after receipt of such information from the director or employee concerned.

    Clearance to deal

    68. (1) A director or employee of an issuer may not deal in any securities relating to the issuer without the authority of the chairperson of the issuer’s board or the issuer’s company secretary or a director designated for that purpose.

    (2) A director or employee of an issuer may not be authorised to deal in any securities relating to the issuer during—

    • (a) a closed period; or(b) any period when there exists any matter which constitutes unpublished price-sensitive information in relation to the issuer’s securities.

    (3) Dealings by a director or employee of an issuer during periods stated in subsection (2) will attract a fine stipulated in Twenty-sixth Schedule.

    (4) A written record must be maintained by the issuer of any notification of dealings by a director or employee pursuant to subsection (2) and of any authority given. Written confirmation from the issuer that such notification and authority, if any, have been recorded must be given to the director or employee concerned.

    Changes in auditors

    69. (1) An issuer must give written notice to the ZSE of—

    • (a) the termination of the appointment of its auditors; or(b) the resignation of its auditors.

    (2) The notice in terms of subsection (1) must ––

    • (a) be given without delay and in any case not later than the end of the business day following the decision to terminate the appointment or after receipt of the auditors’ notice of resignation;(b) state the effective date of the termination or resignation unless the termination or resignation is instantaneous;(c) be accompanied by a letter from the auditors stating the date of termination and the reasons for the termination or resignation, as the case may be.

    (3) The ZSE may, in its discretion, require the company to publish an announcement to its shareholders advising them of the termination of the auditors’ appointment or their resignation and of the reasons for the termination or resignation.

    (4) The annual financial statements for the year in which the termination or resignation took place must state that the auditors’ appointment was terminated or that the auditors resigned and the reasons for the termination or resignation.

    (5) An issuer may only appoint as its auditor and reporting accountants an audit firm, or an individual auditor and reporting accountant who is a member of the Public Accountants and Auditors Board.

    (6) Issuers must change their audit partners every five years and their audit firm every ten years. The name of the individual partner signing on behalf of the audit firm must be included in any report issued by the firm in connection with the issuer.

    SUB-PART H: CONTINUING OBLIGATIONS COMPANIES QUOTED ON ANOTHER SECURITIES EXCHANGE

    70. Issuers whose securities are listed on another securities exchange must ensure that equivalent information is made available at the same time to the market of every exchange on which its securities are listed unless that is prohibited by the rules or requirements of any such securities exchange.

    Information to be processed by the ZSE

    71. Issuers must ensure that information which they provide to the ZSE is the same as that which they provided to other parties, such as transfer secretaries.

    Disclosure of beneficial interests in securities

    72. Issuers must publish the beneficial interests of directors and major shareholders in their annual financial statements as required by Part IX.

    Corporate governance

    73. (1) In addition to complying with Part IX, listed companies must comply with the corporate governance principles set out in this section, regardless of which code they have selected in terms of subsection (1), and must disclose such fact in their annual financial statements.

    (2) An issuer must have a policy on the procedures for appointments to the board. Such appointments must be formal and transparent, and a matter for the board as a whole, assisted where appropriate by a nomination committee. The nomination committee must be made up of non-executive directors only, of whom the majority must be independent.

    (3) An issuer must have a policy showing a clear division of responsibilities at board level to ensure a balance of power and authority, so that no single individual has unfettered powers of decision making.

    (4) The chief executive officer of an issuer must not also hold the position of chairperson of the board of directors and may not be elected chairperson of the company’s board of directors within two years after leaving the post of chief executive officer.

    (5) All issuers must appoint the following committees of their boards, namely—

    • (a) an audit committee;(b) a nomination committee;(c) a remuneration committee; and(d) a risk committee; and must disclose in their annual financial statements the composition of the board and such committees and give a brief description of their mandates, the number of meetings held and other relevant information, including—
      • (i) a brief Curriculum Vitae of each director standing for election or re-election at a general meeting; and(ii) the capacity of each director, categorised as executive, non-executive or independent in accordance with subsection (7).

    (6) The determination of which category is most applicable to each director should be based on the following guidelines—

    • (a) executive directors are those directors who are involved in the day-to-day management and running of the business and are on full time employment of the company or any of its subsidiaries;(b) non-executive directors are those directors who are not involved in the day-to-day management of the business and are not on full-time employment of the company or any of its subsidiaries;(c) independent directors are those non-executive directors who—
      • (i) are not representatives of any shareholder on the board;(ii) have not been employed in any executive capacity for the preceding three financial years by the company or the group of which it currently forms a part;(iii) are not members of the immediate family of any person who is or has been, in any of the past three financial years, employed by the company or the group in an executive capacity;(iv) are not professional advisers of the company or the group, other than in the capacity of directors;(v) are not material suppliers or customers of the company or group;(vi) have no material contractual relationship with the company or group; and(vii) are free from any business or other relationship which could be seen to interfere materially with the individual’s capacity to act in an independent manner.

    (7) The audit committee of an issuer must set the guidelines for recommending the use of external auditors for non-audit services.

    (8) Independent directors must be the majority on the board of directors of an issuer.

    (9) The chairperson of the board of an issuer must be an independent director.

    (10) The appointment of the board chairperson and the Chief Executive Officer of an issuer must be done by the Board.

    Liquidation and corporate rescue

    74. (1) In the event of an issuer being placed, or making application to be placed, under corporate rescue or liquidation, whether voluntary or compulsory, provisional or final, the issuer must immediately notify the ZSE of that fact.

    (2) Where an issuer fails to notify the ZSE as required by subsection (1), it shall be liable to a civil penalty as set out in Twenty-sixth Schedule.

PART V – Conditions for Listing

Introduction

    • 75. (1) Listings or additional listings are granted subject to compliance with these rules and ZSE’s approval.(2) All applications for listing must be submitted to the ZSE through a sponsoring broker.

      Discretion of the ZSE

      76. (1) Notwithstanding these rules, the ZSE may in extraordinary circumstances, exercise its discretion to—

      • (a) grant a listing to an applicant which does not comply with the requirements set out in this Part; or
      • (b) refuse a listing to an applicant which complies with these rules; on the ground that the grant or refusal of the listing is in the interests of the investing public. Applicants that wish to apply for a listing, but do not meet all the criteria prescribed by these rules for the grant of a listing are therefore invited to discuss their intended applications with the ZSE.

      (2) Applicants are required to submit to the ZSE, at an early date, any matter or unusual feature relating to the listing. This procedure will obviate any difficulties that may arise after applicants, without getting the ZSE’s approval, have finalised transactions which may be in conflict with these rules.

      SUB-PART A: CONDITIONS APPLICABLE TO ALL SECURITIES MARKETS

      Applicant to be duly constituted

      77. (1) An applicant must be duly incorporated or otherwise validly established under the law of the country where it is incorporated or established, and must operate in conformity with its constitutive documents and all applicable laws of its country of incorporation or establishment.

      (2) An applicant seeking a listing on the ZSE must enter into a binding undertaking with the ZSE, by completing Seventh Schedule, that from the date of admission to listing of any of its securities it will comply fully with all the listings requirements of the ZSE, irrespective of the jurisdiction in which the applicant is incorporated.

      Directors

      78. (1) The directors of an applicant must—

      • (a) individually undertake to the ZSE that they have exercised their fiduciary duties with due regard to the applicant’s constitutive documents; and
      • (b) collectively undertake to honour their responsibility for the applicant’s compliance with these rules; and
      • (c) ensure that collectively they and the senior management of the applicant possess appropriate expertise and experience for the management of the applicant’s business and disclose such expertise and experience in any listing particulars prepared by the applicant.

      (2) Before listing, an applicant must—

      • (a) submit to the ZSE a director’s declaration in respect of each of the directors of the applicant in the form specified in the Twenty-first Schedule;(b) ensure that each of the directors is free from any conflict of interest between the duties he or she owes to the applicant and his or her other private interests; and
      • (c) where conflicts do exist, ensure that the conflicts are sufficiently declared and disclosed.

      (3) An issuer must ensure that its audit committee is chaired by an independent director possessing the necessary expertise and experience.

      Listing of subsidiary companies or assets

      79. (1) Whenever a company intends to make an offer of securities of a subsidiary or requires or permits a subsidiary to issue securities in order to obtain a listing, the company must ensure that the securities which must be issued and not retained by the holding company are renounced in favour of its shareholders by way of a renounceable offer, unless the ZSE agrees otherwise. The company must hold an extraordinary meeting to agree to waive pre-emptive rights by a vote of 85 per centum in favour of the resolution.

      (2) When, in connection with the listing of a subsidiary company, a listed holding company intends to make an offer of securities in the subsidiary to persons other than wholly-owned entities within the holding company’s group, and the issue or offer will result in—

      • (a) reduction in the fair value exceeding 5 per centum, supported by a fair and reasonable opinion, of the holding company’s investment in such subsidiary before and after the issue;
      • (b) decrease in the percentage holding of securities resulting in less than a 50 per centum holding of securities in such subsidiary company; or
      • (c) loss of board control by the holding company; the securities to be issued that are not retained by the holding company must be renounced in favour of its securities holders by way of a renounceable offer, or the securities holders of the company must specifically approve the issue in accordance with Part VI (methods and procedures of bringing securities to listing).

      Financial information

      80. (1) Financial statements which are presented with an application for listing—

      • (a) must be prepared in accordance with the applicant’s national law and independently audited;
      • (b) must have been reported upon by auditors without any qualification which, in the opinion of the ZSE, is significant for the purposes of listing; and
      • (c) if they contain any profit forecast of the applicant, must be accompanied by a report complying with Part IX and prepared by the applicant’s auditors or reporting accountants.

      (2) An issuer must publish audited annual financial statements for its financial year in the manner specified in the prospectus or pre-listing statement irrespective of the fact that the applicant may have subsequently changed its year-end.

      Status of the securities

      81. (1) The securities for which a listing is sought must be issued in conformity with—

      • (a) the law of the applicant’s country of incorporation or establishment;
      • (b) the applicant’s constitutive documents; and
      • (c) any other authorisations needed for their creation and issue under such law.

      (2) No application will be considered by the ZSE unless the constitutive documents of the applicant or any document that gives rise to the listing of a security has been approved by the ZSE.

      (3) Where an applicant has securities listed on another exchange and applies for admission of such securities to listing on the ZSE, the applicant must comply with the requirements of that exchange and the relevant laws of that country in addition to complying with these rules.

      (4) Securities in each class for which listing is applied must rank pari-passu with all the others in that class in respect of all rights.

      Transferability of securities

      82. (1) The securities for which listing is sought must be fully paid up and freely transferable.

      (2) Where the issuer’s constitutive documents state differently, the ZSE will require the issuer to amend such constitutive documents accordingly.

      (3) The ZSE shall not grant a listing in respect of issues of non-voting equity securities.

      Low and high voting instruments

      83. (1) The ZSE shall not grant a listing of shares or securities which the ZSE considers constitutes equity instruments with high or low votes.

      (2) A low-voting security is one which, subject to compliance with the Companies Act [Chapter 24:03], confers on its holder, both at the proposed time of listing of the equity security and subsequently, reduced voting rights in comparison with the voting rights conferred on the holders of equity securities of the issuer already listed. The voting rights may be reduced either with respect to the number of votes per security or with respect to matters on which the holders of the securities may vote.

      (3) A high-voting security is one which, subject to compliance with the provisions of the Companies Act [Chapter 24:03], confers on its holder, both at the proposed time of listing the instrument and subsequently, enhanced voting rights in comparison with the voting rights conferred on the holders of equity securities of the issuer already listed.

      The voting rights may be enhanced either with respect to the number of votes per security or with respect to the matters on which the holders of the securities may vote, or otherwise.

      Convertible securities

      84. (1) The ZSE shall not grant a listing to convertible securities unless there are sufficient unissued securities in the applicant’s authorised capital into which the convertible securities could convert at the time the convertible securities are issued.

      (2) The applicant for the grant of a listing to convertible securities must undertake to the ZSE that at all times it will maintain sufficient unissued securities to cater for the eventual conversion of the convertible securities.

      Unlisted securities

      85. (1) If an applicant is not granted a listing for additional securities to be issued, or if for any reason certain securities have been delisted—

      • (a) the certificates must be stamped “Unlisted securities” and the stamp must be perpetuated for all future registrations;
      • (b) the share register must signify that the securities are unlisted and a statement regarding the unlisted securities must appear in the applicant’s annual financial statements; and
      • (c) any additional securities issued will be subject to the same requirements. (2) Where votes by shareholders are required by these rules, the votes of holders of unlisted shares must not be counted.

      Public shareholders

      86. (1) Subject to subsection

      (2) and for the purposes of section 87, a security is not regarded as being held by a public shareholder if it is beneficially held, whether directly or indirectly, by—

      • (a) a director of the issuer or any of its subsidiaries;
      • (b) an associate of a director of the issuer or any of its subsidiaries;
      • (c) an employee share scheme or pension fund, or the trustees of such a scheme or fund, which is established for the benefit of directors or employees of the issuer or any of its subsidiaries;
      • (d) a person who, by virtue of any agreement, has the right to nominate a person to the board of directors of the issuer;
      • (e) any person who is beneficially interested in 10 per centum or more of the issuer’s securities of the relevant class, unless the ZSE determines that, in all the circumstances, such person can be classified as part of the public for the purposes of section 87; or
      • (f) an employee of the issuer, where restrictions on trading in the issuer’s listed securities, in any manner or form, are imposed by the issuer on such employee.

      (2) Notwithstanding subsection (1), a security will be regarded as being held by a public shareholder if any person who is interested in 10 per centum or more of securities of the relevant class—

      • (a) is a fund manager or portfolio manager who manages more than one fund or portfolio, where each fund or portfolio is interested in less than 10 per centum of the relevant securities: Provided that this exemption does not apply where the fund or portfolio manager is, in relation to any such fund or portfolio, acting in concert with any person who holds relevant securities which, together with those held by the fund or portfolio in question, represent 10 per centum or more of the relevant securities;
      • (b) is the registered holder of securities which are the subject of a depository receipt programme and no depository receipt holder or anyone else with whom he or she may be acting in concert, holds depository receipts representing 10 per centum or more of the securities concerned, unless the holder is a fund or portfolio manager in accordance with paragraph (a); or
      • (c) is a nominee shareholder and none of the beneficial shareholders which that nominee represents, together with anyone else with whom he or she may be acting in concert, is interested in 10 per centum or more of the securities concerned, unless the beneficial shareholder is a fund or portfolio manager in accordance with paragraph (a).

      (3) The ZSE may, in its discretion, require an issuer to provide it with a declaration that, to the best of the knowledge and belief of its directors, any beneficial shareholders of the company whose shares are registered in the names of one or more nominees do not include any person who may be acting in concert with any other person insofar as it may affect their classification as public shareholders.

      Main Board listing criteria

      87. An applicant seeking a listing on the Main Board must satisfy the following criteria—

      • (a) a subscribed capital of ten million United States dollars, which capital includes reserves and intangible assets but excludes minority interests and revaluations of assets that are not supported by a valuation prepared within the preceding six months by an independent professional expert acceptable to the ZSE; and
      • (b) not less than ten million equity shares in issue; and
      • (c) a satisfactory profit history for the preceding five financial years, if applicable; and
      • (d) at least 30 per centum of each class of equity shares must be held by public shareholders, unless otherwise agreed with the ZSE. Where the issuer has had a private placement prior to the initial public offering, at least 20 per centum of the total issued shares must be offered to the public. Generally the public consists of individuals and institutional investors holding less than 5 per centum of the shares in issue; and(e) the number of public shareholders of listed securities must be at least—
        • (i) 300 in respect of equity shares;
        • (ii) 25 in respect of preference shares;
        • (iii) 10 in respect of debentures;
        • (f) minimum spread criteria should be complied with on a continuous basis.

PART VI – SUB-PART A: METHODS AND PROCEDURES OF BRINGING SECURITIES TO LISTING

Methods

Open to applicants Applicants without equity securities already listed 88. New applicants may bring equity securities to listing by way of—

  • (a) an introduction; or
  • (b) a placing; or
  • (c) by any of the methods referred to in section 89.

Applicants with or without equity securities already listed

89. New applicants or those with equity securities already listed may bring securities, whether of a class already listed or not, to listing by—

  • (a) an offer for sale; or
  • (b) an offer for subscription; or
  • (c) an issue with participating or conversion rights; or
  • (d) a renounceable offer.

Applicants with equity securities already listed

90. (1) Only applicants with equity securities already listed may bring securities, whether of a class already listed or not, to listing by—

  • (a) a rights offer; or
  • (b) a claw-back offer or issue; or
  • (c) a capitalisation issue; or
  • (d) an issue for cash; or
  • (e) an acquisition or merger issue or vendor consideration issue; or
  • (f) a vendor consideration placing; or
  • (g) an exercise of options to subscribe for securities ,including options in terms of executive and staff share schemes; or
  • (h) a conversion of securities of one class into securities of another class.

(2) The ZSE may approve, either generally or specially, any other method by which applicants with equity securities already listed may bring securities for listing.

SUB-PART B: INTRODUCTIONS

Requirements for introductions

91. (1) For an introduction, the applicant must—

  • (a) submit a certified copy of its share register to ZSE; and
  • (b) comply with the conditions for listing as set out in Part V.

(2) An applicant may not bring securities to listing by way of an introduction if there is a pre-existing intention by holders, other than public shareholders, to dispose of a material number of their securities. The applicant must satisfy the ZSE that it has no knowledge of any such intention and that it has informed those holders that they must not dispose of their securities within 18 months of listing.

(3) Where an applicant’s listing has been suspended or terminated—

  • (a) because it was a cash company; or
  • (b) in connection with a reverse take-over; and the applicant is seeking to return to listing, the ZSE may permit an introduction but may require some marketing of the applicant’s securities in order to improve or ensure compliance with the shareholder spread requirements set out in section 50, before approving the listing.

Documents to be submitted to the ZSE for introductions

92. Part I and all available Part II documents described in Part XVII must be submitted to and approved by the ZSE prior to the granting of a listing by way of an introduction. The remainder of Part II and Part III documents must be submitted as soon as possible thereafter and in any event not later than 42 calendar days from the date of listing.

Documents to be published for an introduction

93. Documents relating to an introduction which must be published on the day listing commences are set out in Part XII.

SUB-PART C: PLACINGS Specific requirements for a placing

94. For a placing, the applicant must comply with the conditions for listing as set out in Part V (conditions for listing) and the Companies Act [Chapter 24:03].

Documents to be submitted to the ZSE for a placing

95. (1) Part I and all available Part II documents described in Part XVII must be submitted and approved by the ZSE prior to the granting of a listing by way of a placing.

The remainder of Part II documents must be submitted as soon as possible thereafter and in any event not later than 42 calendar days from the date of listing.

(2) Part III documents described in Part XVII must be submitted as soon as possible and in any event not later than 28 calendar days from the date of a listing by way of a placing.

Documents to be published for a placing

96. The Documents that require publication with regard to a placing are set out in Part XII.

SUB-PART D: OFFERS FOR SALE OR SUBSCRIPTION

Specific requirements for offer for sale or subscription

97. (1) An offer for sale by an issuer of securities in the issuer must be made by way of a renounceable offer to the shareholders of the listed company which will be open for 21 calendar days .The listed company must give the ZSE an undertaking that it will not dispose of those securities whilst the renounceable offer is open.

(2) An offer for sale by an issuer of securities in the listed company’s subsidiary, as described in section 98 (1), listing of subsidiary companies or assets, must be made by way of a renounceable offer of such securities to the securities holders of the listed company, which offer is to be open for a period of 21 calendar days.

The listed company must give the ZSE an undertaking that it will not dispose of any securities which it holds in such subsidiary whilst the renounceable offer is open.

(3) An offer for subscription by an issuer is regarded as an issue for cash and must comply with the requirements contained in sections 129 to 131. An offer for subscription by a new applicant must comply with the requirements contained in sections 98 to 104.

Underwriting of offer for sale or subscription

98. (1) An offer for sale which relates to securities to be issued for subscription must be underwritten.

(2) In an offer for sale referred to in subsection (1), the prospectus ,pre-listing statement or circular of the issuer must include a declaration by its directors that they have carried out due and careful enquiry to confirm that the underwriter and the sub-underwriter (where applicable) can meet its commitments in terms of the offer. In an offer, the issuer’s circular must include a declaration by its directors that they have carried out due and careful enquiry to confirm that all sub-underwriting arrangements have been disclosed in the circular and the agreements be availed for inspection.

(3) The underwriter and the sub-underwriter, where applicable, in an offer for sale referred to in subsection (1) must—

  • (a) satisfy the ZSE that it can meet its commitments through a guarantee letter from the underwriter’s bankers to the ZSE confirming the availability of funds on demand throughout the course of the transaction; and
  • (b) submit an affidavit sworn by two of its directors confirming its financial capacity to carry out the terms of the underwriting; or
  • (c) if it is regulated by another regulator, obtain confirmation from that regulator that such underwriting is within the scope of its licensable activities; and
  • (d) if it is unregulated, submit to the ZSE a letter of undertaking by the underwriter to the issuer that its commitment is irrevocable and that it will make funds available to purchase any unsubscribed securities in the event that the offer is not fully subscribed.

(4) Any underwriting commission paid to a securities holder of the company—

  • (a) must be separately disclosed under transaction costs in the circular; and
  • (b) must not be greater than the current market rate payable to independent underwriters: Provided that, in the case of charges for private placements, the level of charges should not exceed current underwriting levels and the applicant must present evidence to the ZSE proving the reasonableness of such commission.

(5) Where an underwriter holds 35 per centum or more of the issued share capital of the issuer after it takes up the unsubscribed shares of an issue, the underwriter must reduce its shareholding to below 35 per centum or make an offer to minorities in accordance with Part X (Transactions) within twelve months. The ZSE has the discretion to vary the time-frame depending on the circumstances of the issuer.

Commission payable

99. The rate of commission payable by applicants on issues by way of an offer for sale or subscription is a minimum of 0, 5 per centum of the issue.

Over-subscriptions

100. (1) An issuer must submit to the ZSE its policy in relation to over-subscription for prior approval. In the event of an over-subscription that policy must be applied and the formula for the basis of allotment must be calculated in such a way that a person will not, in respect of his or her application, receive an allocation of a lesser number of securities than any other subscriber who applied for a lesser number.

(2) Where the initial listing is over-subscribed or cancelled and persons are owed subscription refunds in respect of their applications, the sponsoring broker or issuer must ensure that the subscription moneys and all interest earned on such moneys, calculated from the date of receipt of the moneys by the company concerned, are paid back to the subscribers before the shares are listed or on the day following the decision to cancel the listing in the case of a cancellation.

Documents to be submitted to the ZSE by listed companies

101. Listed companies engaged in offers for sale or subscription must submit to the ZSE the documents listed in section 363 (documents to be submitted by issuers) at the times specified in section 104.

Documents to be submitted to the ZSE by new applicants

102. (1) Part I documents and all available Part II documents described in Part XVII must be submitted to the ZSE by new applicants engaged in a listing by sale or subscription, and must be approved by the ZSE prior to listing being granted.

The remainder of Part II documents must be submitted as soon as possible thereafter and in any event not later than 42 calendar days after the date of listing.

(2) Part III documents referred to in Part XVII must be submitted to the ZSE by new applicants engaged in a listing by sale or subscription as soon as possible and in any event not later than 42 days after the date of listing.

Documents to be published

103. The documents to be published regarding an offer for sale or subscription are shown in Part XII and must be published in accordance with section 104.

Timetable for publication of documents

104. The table below sets out the timetable, as a guide, for offers for sale or subscription. The dates after the closing of the offer are indicative and may be advanced as long as the sequence of events is not disturbed.

Renounceable offers

105. An applicant who wishes to make a renounceable offer must comply with the conditions for listing set out in Part V.

Ability to trade

106. (1) The right of an issuer’s shareholders to subscribe for securities in the applicant referred to in section 115 (2) must be made by means of the issue of a renounceable offer or other negotiable document which may be traded as “nil paid” rights for a period of not less than 21 calendar days before payment is due.

(2) The enforcement of the right of holders of securities of an issuer to subscribe for securities in the applicant must be done by means of a renounceable offer to such holders of securities through the issue of renounceable letters of allocation or other negotiable documents, traded as “nil paid” rights, for a period in accordance with the relevant timetable.

Shareholder spread

107. (1) The issued share capital of an applicant and the letters of allotment issued to implement the renounceable offer must be listed at the same time.

(2) The issuer making the renounceable offer shall be required to prove to the ZSE that it will comply with the minimum spread requirements following the close of the renounceable offer.

General requirements for renounceable offer

108. The requirements of a rights offer will apply to a renounceable offer to the extent appropriate to them.

Documents to be submitted to the ZSE in respect of renounceable offer

109. The documents listed in Part XVII (documents to be submitted to the ZSE) for renounceable offer should be submitted to the ZSE according to the timetable set out in section 111.

Documents to be published in respect of renounceable offer

110. (1) An issuer is required to—

  • (a) publish two press announcements giving details of the renounceable offer;
  • (b) publish press announcements or issue circulars in accordance with Part XII; and
  • (c) despatch letters of allotment to its shareholders; according to the timetable set out in section 111.

(2) The press announcements and pre-listing statement must comply with section 274 (contents of all circulars) and the documents that require publication regarding a renounceable offer are referred to in Part XII.

Timetable

111. The timetable below is for guidance only and may be altered. The ZSE’s approval of a proposed timetable must be obtained in all cases.


SUB-PART F: RIGHTS OFFERS

Specific requirements for rights offers

112. Letters of application, allocation or acceptance must be issued for rights offers and must be renounceable.

Underwriting

113. (1) A rights offer must be underwritten.

(2) In a rights offer the underwriter and the sub-underwriter, where applicable, must—

  • (a) satisfy the ZSE that it can meet its commitments through a guarantee letter from the underwriter’s bankers addressed to the ZSE confirming the availability of funds on demand throughout the course of the transaction;
  • (b) submit an affidavit sworn to by two of its directors confirming its financial capacity to carry out the terms of the underwriting;
  • (c) if it is regulated by another regulator, obtain a confirmation that such underwriting is within the scope of its licensable activities; and
  • (d) if it is unregulated, submit to the ZSE a letter of undertaking by the underwriter to the issuer that its commitment is irrevocable and that it will make funds available to purchase any unsubscribed securities in the event that the offer is not fully subscribed.

(3) In a rights offer the issuer’s circular must include a declaration by its directors that they have carried out due and careful enquiry to confirm that––

  • (a) the underwriter can meet its commitments in terms of the offer;
  • (b) all sub-underwriting arrangements have been disclosed in the circular and the agreements be availed for inspection.

(4) Where an underwriter holds 35 per centum or more of the issued share capital of the issuer after it takes up the unsubscribed shares of an issue, the underwriter must reduce its shareholding to below 35 per centum or make an offer to minorities in accordance with Part X within twelve months. The ZSE has the discretion to vary the time-frame depending on the circumstances of the issuer.

(5) Any underwriting commission paid to a holder of securities of a company must—

  • (a) be separately disclosed under transaction costs in the circular; and
  • (b) not be greater than the current market rate payable to independent underwriters. In the case of charges for private placements the level of charges must not exceed current underwriting levels, and the applicant must present evidence to the ZSE of the reasonableness of such underwriting commission.

Excess security applications

114. (1) A rights offer may include the right to apply for excess securities subject to such right being transferable upon renunciation of the letters of allotment. In a rights offer which includes the right to apply for excess securities, the right to apply for excess securities must be transferable upon renunciation of a letter of allotment.

(2) In respect of applications for excess securities, the pool of excess securities must be allocated equitably, taking into account the number of securities held by the shareholder, including those taken up as a result of the rights offer.

(3) The excess securities applied for by a shareholder may be used to round up the holdings to multiples of 100 securities.

General provisions regarding rights offers

115. (1) The approval of the ZSE must be obtained for rights offers priced at above the ruling price.

(2) Unless circumstances are such as to warrant a concession being granted by the ZSE, the ZSE requires the letters of allocation to be listed.

(3) Forms of instruction in respect of letters of allotments must be sent to all shareholders of which only Form A (Form of Renunciation) requires the signature of the renouncee. Form B (Registration application form) and Form C (Application for split forms) must not be required to be signed.

(4) The forms referred to in subsection (3), which are available from transfer secretaries, form part of the rights offer circular and must be submitted to the transfer secretaries once signed.

Documents to be submitted to the ZSE

116. The documents listed in Part XVII for rights offers must be submitted to the ZSE at the relevant times specified in the timetable set out in section 118(1).

Documents to be published or circulated

117. (1) Press announcements must be published in respect of a rights offer and must give—

  • (a) the last date for shareholders to register to participate in the rights offer; and
  • (b) the terms of the rights offer; and
  • (c) the dates of the rights offer; and
  • (d) the results of the rights offer.
  • (2) In addition to the announcements referred to in subsection (1), a circular or pre-listing statement must be sent to shareholders.

(3) The press announcements, rights offer circular or pre-listing statement must comply with sections 284 (1) and 285 and must be issued according to the timetable in section 118.

Timetable for rights offers

118. (1) The timetable below is a guide and applicable to an issuer making a rights offer—


Specific requirements

119. (1) The securities in a claw-back offer must be offered to the applicant’s shareholders by way of a renounceable letter or other negotiable document which must be listed as “fully paid” or “nil paid” rights, for a period of at least 21 calendar days, before payment for the securities is due.

(2) The requirements of section 112 (specific requirements for rights offers) in respect of rights offers also apply to claw-back offers.

Capitalisation issues: specific requirements

120. (1) The ZSE will not approve any announcement, advertisement or circular in which a capitalisation issue is in any way presented as a dividend when shareholders are not entitled to elect to receive a cash dividend.

(2) Shareholders’ approval must be obtained by the applicant to give effect to the capitalisation of the share premium or reserves if the articles of association do not permit the directors to do so without the approval of the shareholders.

Documents to be submitted to the ZSE

121. The documents listed in Part XVII for capitalisation issues must be submitted to the ZSE at the times specified in that Part and in accordance with the timetable set out in section 123(1).

Documents to be published

122. (1) A press announcement referred to in section 117(1) must be published and a circular relating to it must be sent to shareholders.

(2) The press announcement and circular must comply with Part XII and be issued according to the timetable set out in section 123(1).

Timetable for capitalisation issue

123. (1) The timetable for a capitalisation issue is set out below as a guide— Day Event Friday (D+0) Publication of press announcement Friday (D+14) Record date for participation in capitalisation issue Lodge application for listing the maximum number of securities that could be issued Day Event Monday (D+17) Securities listed ex-entitlement Circular made available Maximum number of securities that could be issued listed if the listing has been granted Wednesday (D+ 19 ) Last day for postal registration Friday (D+21) Post circular to shareholders Securities allotted and listed Lodge signed application for listing giving details actual number of securities issued Securities allotted and listed Share certificates posted to shareholders (2) Deviations from the timetable should be approved by the ZSE. (3) Should a cash underpin for the capitalisation shares be offered by a third party, the requirements of sections 287(3) must be applied with necessary modifications.

SUB-PART G: SCRIP DIVIDEND AND CASH DIVIDEND ELECTIONS

Description

124. (1) A scrip dividend comprises capitalisation shares where shareholders are afforded the right to elect to receive in lieu of cash dividends. Dividend and dividend yield statistics issued by the ZSE will reflect the full amount of the dividend before shareholder election.

(2) A cash dividend election arises where a capitalisation issue is declared and shareholders are afforded the right to elect to receive a cash dividend in lieu of the capitalisation or bonus shares.

(3) The right of election referred to in subsections (1) and (2) must not be prohibited by the issuer’s articles of association.

(4) The ZSE will not approve an announcement or circular in which a capitalisation issue is in any way presented as a dividend when shareholders are not entitled to elect to receive a cash dividend.

Specific requirements for scrip dividends and cash dividend election

125. (1) A form of election must be dispatched with the circular and must contain—

  • (a) a statement that the election may be made in respect of all or part of the securities held or deemed to be held at the close of business on the record date and that fractions will be paid out in cash;
  • (b) the ratio of entitlement; and
  • (c) a statement that no late postal elections will be accepted.

(2) Where the articles of association do not permit the directors to effect any capitalisation of the share premium or reserves without the approval of the shareholders, the directors must obtain such approval.

(3) Where the ratio of entitlement is proposed to be other than that of a whole securities per 100—

  • (a) the date of payment of the scrip dividend must be at least 21 calendar days and at most 42 calendar days from the last day to register; and
  • (b) fractions of securities must be rounded up and paid in cash.

Documents to be submitted to the ZSE

126. The documents detailed in Part XVII (documents to be submitted to ZSE) for scrip dividends and cash dividends election should be submitted to the ZSE at the times specified in that Part.

Documents to be published

127. (1) Two press announcements must be published and a circular sent to shareholders in respect of any scrip dividend or a cash dividend election.

(2) The press announcements and circular must comply with Part XII and be issued in accordance with the timetable in section 128.

Timetable for scrip dividend

128. This timetable is a guide for a scrip dividend— Day Event Friday (D+0) Publication of first press announcement Monday (D+10) Publication of second press announcement Friday (D+14) Record date for participation in scrip dividend All documents described in Part XVII must have been submitted to and approved by the ZSE Monday (D+17) Securities listed ex-entitlement Circular made available Maximum number of securities that could be issued listed if listing is granted Friday (D+21) Post circular to shareholders Friday (D+42) Last day for election Monday (D+45) Press announcement of results of issue Lodge signed application for listing detailing actual number of securities issued Wednesday (D+47) Securities allotted and listed Share certificates and dividend warrants posted to shareholders

SUB-PART H: ISSUES FOR CASH

Specific requirements: Issues for cash

129. (1) An applicant may only issue for cash securities with voting rights where those securities are of a class already issued: Provided that—

  • (i) the issue must be of a class already in issue and made to public shareholders as defined in section 86 and, if any of the equity securities must be issued to non-public shareholders as defined in sections 86(1), this fact must be disclosed;
  • (ii) issues in the aggregate in any one financial year may not exceed 25 per centum of the applicant’s issued share capital of that class. In this calculation, the securities of a particular class will be aggregated with the securities which are compulsorily convertible into securities of that class;
  • (iii) the maximum discount permitted— A. where shareholders’ approval is sought in terms of paragraph
  • (a) of the definition of issue for cash must be subject to shareholder’s approval; B. where shareholders’ approval is sought in terms of paragraph
  • (b) of the definition of issue for cash must be 10 per centum of the weighted average traded price of those securities over the 30 days prior to the date that the price of the issue is determined or agreed upon by the directors of the applicant. The ZSE should be consulted for a ruling if the applicant’s securities have not traded in that 30-day period;
  • (iv) the number of securities of a class which may be issued in terms of the definition of issue for cash must be based on the number of securities of that class in issue as at the date of the application.

(2) The ZSE may waive all or any of the requirements in subsection (1), and section 130 (voting) subsections (1) and (2) in relation to an issue of securities for cash if it is satisfied that the applicant is in severe financial difficulty or that there are other exceptional circumstances to justify the waiver.

(3) The number or maximum number of equity securities to be issued must be disclosed if—

(a) the discount at which the securities must be issued is not limited; or

(b) the discount at which the securities must be issued is limited.

(4) If the issue is to a related party as described in Part XI, the issue must be subject to the issuer providing holders of its equity securities with a fair and reasonable statement complying with Fifth Schedule given by an independent professional expert acceptable to the ZSE and indicating whether or not the issue is fair and reasonable to equity securities holders, excluding the related party if it is an equity security holder of the issuer.

Voting

130. (1) A resolution to approve the waiver of pre-emptive rights in an issue of securities for cash, where 35 per centum or more of the applicant’s issued securities are held by the public, must be passed by 85 per centum of votes cast by shareholders present or represented by proxy at a general meeting called for that purpose.

(2) If the applicant has less than 35 per centum of its securities held by the public the resolution to approve the waiver of pre-emptive rights must be passed by 90 per centum of votes cast by shareholders present or represented by proxy at a general meeting called for that purpose.

(3) The consequence of any issue of securities for cash should not, in respect of the applicant, constitute an “affected transaction”.

Documents to be submitted to the ZSE

131. The documents detailed in Part XVII concerning issue for cash should be submitted to the ZSE in respect of an issue of securities for cash, at the times specified in that Part.

Documents to be published

132. Where approval has been obtained for an issue of securities for cash a circular must be sent to shareholders giving details of the issue. The circular must contain the information set out in section 285.

Announcements

133. A company that has issued securities in terms of a specific issue for cash must publish an announcement containing full details of the issue, including—

  • (a) the number of securities issued;(b) the average discount to the weighted average traded price of the securities over the 30 days prior to the date that the price of the placing was determined or agreed upon by the directors of the company;(c) if the discount exceeded 10 per centum, the name of the independent professional expert who prepared the statement that the discount was fair and reasonable and an indication of where copies of such statement can be obtained; and(d) the effects of the issue on net asset value and earnings per share.

SUB-PART I: ACQUISITION OR MERGER ISSUES

Description

134. An acquisition, merger issue or vendor consideration issue is an issue of securities in consideration for an acquisition of assets which excludes the extinction of a liability, obligation or commitment or an issue of securities for an acquisition of, or merger with, another company as consideration for the securities of that other company.

Specific requirements

135. (1) Listing will only be granted to securities issued as consideration for an acquisition or merger if the ZSE determines that the issue is for the bona fide purchase of assets and not a circumvention of shareholders’ rights of pre-emption.

(2) The ZSE must be consulted when an issuer proposes to issue securities as consideration for the acquisition of assets.

Documents to be submitted to the ZSE

136. The documents listed in Part XVII must be submitted to the ZSE at the times specified in that Part.

Documents to be published or circulated

137. The documents which must be published in respect of an acquisition or merger issue are set out in Parts X (transactions) and XII (circulars, prelisting statements, prospectus and press announcements).

SUB-PART J: VENDOR CONSIDERATION PLACINGS

Specific requirements

138. In a vendor consideration placing—

  • (a) all vendors must have an equal opportunity of participating in the placing;
  • (b) where the securities to be placed are equity securities of a class already listed, the placing price must not be at a discount of more than 10 per centum to the weighted average traded price of those minimum securities over the 30 calendar days prior to the date that the price of the placing is determined or agreed upon by the directors of the company, or be a 10 per centum discount to the 30-day weighted average trading price prior to the date of the placing;
  • (c) a determination of the ZSE must be obtained if the issuer’s securities have not traded in the 30-day period referred to in paragraph (b); and(d) the requirements of Part V (conditions for listing) apply if the securities being placed are a class of equity securities not already listed, unless the issuer has another class of equity security already listed, in which case the requirement as to the spread of shareholders shall apply.

Exercise of options to subscribe for securities (including options in terms of executive and staff share schemes)

139. (1) Applications for listing of securities issued in terms of options to subscribe for securities must be made in terms of Part XVII.

(2) Application for listing of shares in terms of executive and staff share schemes may be for block listings or for specific allotments and must comply fully with Fourteenth Schedule (requirements for Executive and Staff share Schemes).

Issues with participating or conversion rights

140. Unless the ordinary shareholders have waived their rights, classes of securities which have participating rights to profits or have equity conversion rights must be offered to ordinary shareholders of a company by means of a rights offer, unless they are issued—

  • (a) as a claw-back offer;
  • (b) as an issue for cash;
  • (c) for the acquisition of assets or a merger; or
  • (d) in circumstances which the ZSE considers to be exceptional.

SUB-PART K: REPURCHASE OF SECURITIES Description

141. (1)An acquisition by an issuer of its own shares in accordance with sections 77 to 84 of the Companies Act [Chapter 24:03] constitutes a repurchase of securities, and the company must comply with sections 142 to 150 of these rules on terms—

  • (a) specifically approved by shareholders in a general meeting in respect of that particular repurchase: Provided that repurchase by a company of its own securities in any one financial year must not, in the aggregate, exceed 40 per centum of the company’s issued share capital of that class; or
  • (b) generally approved by shareholders in a general meeting by their giving to the directors of the company a renewable mandate, valid until the company’s next annual general meeting or for 15 months from the date of the resolution, whichever is the shorter, to repurchase its securities subject to the requirements of the ZSE and to any other restrictions set out in the resolution: Provided that a general repurchase may not exceed 20 per centum of the company’s share capital of that class in that financial year.

Requirements for specific authority to repurchase securities

142. (1) In this section— “specific repurchase” means a repurchase by a company of its own securities which has been specifically approved by shareholders in accordance with section 141(1)(a).

(2) An applicant may only make a specific repurchase of its securities—

  • (a) in the case of an offer to all shareholders, if it is on a pro rata basis to their existing holdings, or from specifically named shareholders;
  • (b) if it is authorised by its articles to repurchase its securities; and
  • (c) if authority has been given in terms of a special resolution of the issuer by shareholders other than—
  • (i) controlling shareholders and their associates;
  • (ii) any party acting in concert; or
  • (iii) any shareholder who is participating in the repurchase and who is not regarded as being part of the public in terms of section 87 (main Board listing criteria).

(3) A pro rata offer referred in subsection (2)(a) must remain open for 21 days.

Circular for repurchase of securities

143. (1) A circular on a repurchase of securities must contain the following—

  • (a) the minimum contents of any circular as required by section 274 (contents of all circulars);
  • (b) general information about the repurchase, including—
  • (i) the names and addresses of directors and major shareholders;
  • (ii) material changes;
  • (iii) directors’ interest in securities;
  • (iv) share capital;
  • (v) directors’ responsibility statement; and
  • (vi) litigation statement;
  • (c) the reason for and method by which the company intends to repurchase its securities, including the number of securities to be repurchased and the price to be paid;
  • (d) in the case of a repurchase from specific shareholders, the names of the shareholders and their current shareholding and the names and details of the parties excluded from voting as provided in section 142(2)(c);
  • (e) in the case of a pro rata offer, a statement that a shareholder may tender more securities and that a shareholder who tenders securities in addition to the offer must be treated on an equitable basis. A policy on the treatment of such cases must be submitted to the ZSE for prior approval;
  • (f) the effect on earnings per share and net asset value and tangible net asset value per share on the group of the proposed repurchase;
  • (g) a statement by the directors—
  • (i) that the issuer and the group will be able in the ordinary course of business to pay their debts for a period of 12 months after the date of the approval of the circular;
  • (ii) that the assets of the issuer and the group will be in excess of the liabilities of the company and the group. For this purpose the assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements;
  • (iii) confirming the adequacy of ordinary capital and reserves of the issuer and the group for a period of 12 months after the date of the approval of the circular; and
  • (iv) confirming the adequacy of the working capital of the issuer and the group for a period of 12 months after the date of the approval of the circular;
  • (h) a statement as to the source of funds to be utilised; and
  • (i) in the case of a specific repurchase as defined in section 142, a statement from an independent professional expert acceptable to the ZSE which complies with the Fifth Schedule and indicates whether or not the premium paid is fair and reasonable to shareholders of the company if such a premium is more than 5 per centum of the weighted average of the market value of the securities for the five business days immediately preceding the announcement of the repurchase.

(2) Financial information and auditors’ reports, in terms of section 148 (financial information) must be submitted to the ZSE simultaneously with the circular to shareholders.

Announcements of offers for repurchase of securities

144. (1) In respect of a pro rata offer the announcement must contain—

  • (a) in the case of the first announcement the—
  • (i) information that a circular containing details of the offer and notice of general meeting will be dispatched to shareholders; and
  • (ii) date of the meeting at which the specific authority will be sought; and
  • (iii) last day to register in order to participate in the offer; and
  • (iv) terms and conditions of the offer including the ratio and the price; and
  • (v) opening and closing dates of the offer; and
  • (vi) date of payment by the company;
  • (b) in the case of the second announcement the—
  • (i) details of the pro rata offer; and
  • (ii) results of the meeting;
  • (c) in the case of the third announcement the—
  • (i) results of the pro rata offer and the cost; and
  • (ii) date on which the securities will be cancelled, and the listing terminated, if applicable; and
  • (iii) effect on the earnings per share, the net asset value per share and the tangible net asset value per share.

(2) In respect of a specific repurchase, as defined in section 141 from a specific shareholder, the announcement must contain—

  • (a) the terms of the repurchase; and
  • (b) the date of the meeting at which the specific authority will be sought; and
  • (c) the name of the person from whom the specific repurchase is to be made; and
  • (d) the date on which the repurchase is to be made and the date on which the securities will be cancelled and the listing terminated, if applicable; and
  • (e) the effect on the earnings per share, the net asset value and the tangible net asset value per share; and
  • (f) a statement that a circular containing the details specified in paragraphs (a) to (e) will be dispatched to shareholders.

Requirements for general authority to repurchase securities

145. (1) In this section— “general repurchase” means a repurchase by a company of its own securities which has been generally approved by shareholders in accordance with section 141.

(2) An issuer may only make a general repurchase of securities if—

  • (a) the repurchase of securities is implemented on the ZSE
  • (b) the issuer is authorised by its articles to repurchase its securities;
  • (c) the issuer is authorised by shareholders by a special resolution of the company in general meeting, which resolution is to be valid until the next annual general meeting or 15 months from the date of the resolution, whichever is the shorter; and
  • (d) the repurchases will not be made at a price greater than 5 per centum above the weighted average of the market value for the securities for the five business days immediately preceding the date of repurchase.

Notice of general authority to repurchase

146. (1) If, at its annual general meeting, an issuer seeks a general authority to repurchase its own securities, the following information must be included in the notice convening the general meeting—

  • (a) a statement of the board of directors’ intentions regarding the utilisation of the authority sought;
  • (b) the maximum number of securities to be repurchased and the price and date at which the repurchase is to take place;
  • (c) a statement by the directors that—
  • (i) the company and the group will be able, in the ordinary course of business, to pay their debts for a period of 12 months after the date of the notice of annual general meeting;
  • (ii) the assets of the issuer and the group will be in excess of the liabilities of the company and the group. For this purpose the assets and liabilities should be recognised and measured in accordance with the accounting policies used in the latest audited annual group financial statements;
  • (iii) the ordinary capital and reserves of the issuer and the group will be adequate for a period of 12 months after the date of the notice of annual general meeting; and
  • (iv) the working capital of the issuer and the group will be adequate for a period of 12 months after the date of the notice of annual general meeting.
  • (d) a statement in the resolution that the authority sought will be limited to paragraphs (c) and (d) of section 145 (2).

(2) If, at a meeting other than the annual general meeting, an issuer seeks a general authority to purchase its own securities, a circular complying with paragraphs (a) to (d) of subsection (1) must accompany the notice of general meeting and must also contain—

  • (a) all information referred to in section 274 (contents of all circulars); and
  • (b) general information including—
  • (i) the names and addresses of directors;
  • (ii) the identities of major shareholders;
  • (iii) material changes;
  • (iv) directors’ interest in securities;
  • (v) share capital;
  • (vi) a directors’ responsibility statement; and
  • (vii) a litigation statement.

(3) Financial information and auditors’ reports referred to in sections 148(1) and (2) must be submitted to the ZSE before the company repurchases its securities on the open market.

(4) Where an issuer fails to submit financial information as required under subsection (3) it shall be liable to a fine set out in Twenty-sixth Schedule.

SUB-PART L: ANNOUNCEMENTS FOLLOWING REPURCHASE OF SECURITIES

Open market

147. When a company has cumulatively repurchased 3 per centum of the initial number of the relevant class of securities (the number of that class of shares in issue when the general authority from shareholders is granted), and for each 3 per centum aggregate of the initial number of that class acquired thereafter, an announcement must be made as soon as possible, and in any event not later than the end of on the business day following the day on which the relevant threshold is reached or exceeded, and must contain the following information—

  • (a) the dates of the repurchase of the securities; and
  • (b) the highest and lowest prices paid for the securities; and
  • (c) the number and value of securities repurchased; and
  • (d) the extent of the authority outstanding by number and percentage, calculated on the number of shares in issue before any repurchases were made; and
  • (e) a statement as to the source of funds utilised; and
  • (f) a statement by the directors that—
  • (i) the issuer and the group will be able in the ordinary course of business to pay its debts for a period of 12 months after the date of the announcement; and
  • (ii) the assets of the issuer and the group will be in excess of the liabilities of the company and the group. For this purpose the assets and liabilities must be assessed in accordance with the accounting policies used in the latest audited group annual financial statements; and
  • (iii) the ordinary capital and reserves of the issuer and the group will be adequate for a period of 12 months after the date of the announcement referred to in section 146; and
  • (iv) the working capital of the company and the group will be adequate for a period of 12 months after the date of the announcement referred to in section 146; and
  • (v) the effect of the repurchase on the earnings per share, the net asset value and the tangible net asset value per share; and
  • (vi) the date on which the securities will be cancelled and their listing terminated, if applicable.

SUB-PART M: FINANCIAL INFORMATION

Historical financial information

148. (1) The company’s directors must submit to the ZSE a copy of the audited annual financial statements of the issuer or the group, as appropriate. Where more than nine months have lapsed since the financial year-end of the company and the company seeks to repurchase its securities, the company’s directors must prepare and submit to the ZSE the most recent interim report of the company or the group, required to have been distributed in terms of Part IV (continuing obligations). The interim report must include the auditors’ report and be prepared in accordance with IFRS requirements on Interim Reporting, any applicable statute and Part IX (financial information).

(2) An issuer or its subsidiary may not repurchase securities within 40 business days before publication of its annual or interim results. The company or its subsidiary may not repurchase securities if the company is under cautionary announcement.

(3) The requirements of sections 141 to 147 also apply to the purchase by a subsidiary of securities in its holding company except for transactions entered into on behalf of bona fide third parties by the company or any other member of its group on arms’ length terms. An issuer must obtain approval from its shareholders, in accordance with section 141 (2) or section 145 before any major unlisted subsidiary of the listed company undertakes to purchase securities in its holding company.

(4) If a company has announced that it will repurchase its securities, it must pursue the proposal unless the ZSE permits the company, on good cause, not to do so.

(5) Where a repurchase by a company of its own securities is to be made, directly or through intermediaries, from a related party the requirements of Part XI (transactions with related parties) must be complied with unless—

  • (a) a pro-rata offer is made to all holders of the class of securities on the same terms; or
  • (b) in the case of an open-market repurchase pursuant to a general authority granted by shareholders, it is made without any prior understanding or arrangement between the company and the related party.

(6) A company may only undertake a repurchase of securities if it can maintain shareholder spread requirements in accordance with Part IV after such repurchase.

SUB-PART N: PURCHASE OF SECURITIES OTHER THAN EQUITY SHARES

Notification of decision to repurchase

149. Where a company intends to make a proposal which is to be open to all holders in respect of all or part of their holdings, or to repurchase any of its securities other than equity shares it must—

  • (a) ensure that no dealings in the relevant securities are carried out by or on behalf of the issuer or another member of its group, or its associate or subsidiary until the proposal has either been submitted to the ZSE or abandoned; and
  • (b) notify the ZSE of its decision to repurchase unless the repurchase will consist of individual transactions in accordance with the terms of issue of the securities, whether for sinking fund purposes or otherwise.

Notification of repurchases, early redemptions and cancellations

150. (1) Any repurchases, early redemptions or cancellations of an issuer’s securities, other than equity shares, by or on behalf of the company or any other member of the group of which it is part, must be notified to the ZSE when an aggregate of three per centum of the initial number of the relevant class of securities has been purchased, redeemed or cancelled, and for each three per centum in aggregate of the initial number of that class acquired thereafter.

(2) A notification under subsection (1) must be made as soon as possible and in any event not later than 08.30 hours on the business day following the day on which the relevant threshold is reached or exceeded, and must contain the following information—

  • (a) the number of securities acquired, redeemed or cancelled since the last such notification; and
  • (b) the number of the class of securities which remain outstanding; and
  • (c) when the securities repurchased must be cancelled and their listing terminated, if applicable.

Period between repurchase and notification

151. In circumstances where the repurchase is not being made pursuant to a general offer announced in accordance with section 147 (announcements following repurchase of securities) and the repurchase causes a relevant threshold in section 141 (repurchase of securities) to be reached or exceeded, no further repurchases may be effected until after notification in compliance with section 141 has been made.

Convertible securities

152. In the case of securities which are convertible into, exchangeable for, or carry a right to subscribe for equity securities, repurchases must not be made at a price more than five per centum above the weighted average of the market value for the securities for the five business days immediately preceding the date of repurchase unless a partial offer is made to all holders of that class of securities on the same terms.

Reduction of share capital

153. A company that wishes to reduce its share capital must—

  • (a) comply with the relevant provisions of the Companies Act [Chapter 24:03];
  • (b) obtain the approval of its shareholders in a general meeting held after the issue of a circular that includes a statement giving—
  • (i) the directors’ opinions on the transaction; and
  • (ii) a recommendation as to how shareholders should vote at the general meeting to approve the transaction; and
  • (iii) an indication as to how the directors intend to vote; and
  • (c) obtain the authorisation of shareholders given in terms of a general resolution.

General authority to reduce share capital

154. If, at its annual general meeting, a company seeks a general authority to reduce its share capital, a statement of the board of directors’ intentions regarding the utilisation of the authority sought must be included in the notice of the general meeting.

Circular for reduction of share capital

155. The circular referred for reduction of share capital must contain—

    • (a) the contents of all previous circulars referred to in section 274 (contents of all circulars);
    • (b) general information on the company, including—
      • (i) the names and addresses of the directors;
      • (ii) the identity of major shareholders;
      • (iii) material changes;
      • (iv) directors’ interests in securities;
      • (v) the share capital of the company;
      • (vi) a directors’ responsibility statement; and
      • (vii) a litigation statement.
      • (c) the means and method by which the company intends to reduce its share capital; and
      • (d) the effect on earnings per share and net asset value.

SUB-PART O:

GENERAL Exchange control approval

156. The ZSE will not approve an issue of securities unless it receives copies of any necessary authority from the Reserve Bank of Zimbabwe, giving a ruling regarding the use of funds introduced through normal banking channels from abroad or from a non-resident account or from an emigrant’s blocked account relating to such issue.

Securities registered in the name of nominee companies

157. (1) Where an issuer intends to enter into a transaction or scheme which may, in its effect, discriminate between shareholders who hold the issuer’s securities beneficially through nominee companies and shareholders who hold the issuer ’s securities directly, the issuer must ensure that the nominee companies timeously provide it with lists, certified as correct by directors of the nominee companies, of the individual shareholdings of the beneficial shareholders as at the relevant record date, by number and name, in order to ensure that all shareholders in the issuer receive equal treatment.

(2) Subsection (1) applies to all issuer transactions which give rise to fractional entitlements, such as distributions in specie of, or subscriptions for, securities in subsidiary companies or capitalisation issues.

Share certificates

158. (1) The ZSE may require certificates or other documents of title to be issued on the day of listing of new securities or within seven days from the date of lodgement of the certificates for transfer or splitting.

(2) All applicants that have not adopted Certified Transfer Deed Procedures must register scrip within 24 hours of receipt.

(3) The ZSE may not grant a listing to an issue of securities until the relevant share certificates, or other documents of title, have been made available, except where the relevant securities arise out of an entitlement derived from a holding in a listed security. Deals entered into between the date of commencement of the listing and the date the document of title is made available must be settled during the week following the date the document of title is made available.

(4) Where it is proposed to issue share certificates which are distinct from existing listed securities, the company must submit to the ZSE a copy of the proposed certificate and a copy of the existing certificate. The procedures to be adopted thereafter must be agreed at this stage between the company and the ZSE.

Over-allotment size

159. An over-allotment may not be more than 15 per centum of the issue size.

Acceptance of late postal deliveries

160. (1) Applicants must accept for registration deliveries bearing a postmark up to and including the date of the last day to register which are received within three days of that date.

(2) The last day to register should be a Friday, but if the Friday is a holiday then the previous business day must be taken as the last day to register.

(3) The ZSE will consider allowing the last day to register to fall on another day only in exceptional circumstances.

Odd-lot offers

161. (1) Pursuant to subsection (2), an “odd-lot” offer occurs when an issuer intends reducing administrative costs resulting from a large number of “odd-lot” holders. An “odd-lot”, is a total holding of less than 100 securities.

(2) When an issuer proposes to make an odd-lot offer, holders may—

      • (a) elect to retain their odd-lot holding; or
      • (b) elect to top up their odd-lot holding to one hundred securities; or
      • (c) elect to sell their odd-lot holding.

(3) If the top up and sale prices are not the same, the prices must in all circumstances be to the advantage of the holders concerned.

(4) Listed companies must not undertake odd-lot offers where they could lead to a contravention of the minimum spread requirements.

(5) In any distribution, award or reconstruction where shareholders may receive odd-lot entitlements, the affected shareholders must, where the issuer wishes to compensate such shareholders in monetary terms, be given the opportunity to elect to receive such odd-lot entitlements.

(6) In respect of odd-lot offers, the documents detailed in Part XVII must be submitted to the ZSE.

(7) The document that requires publication regarding odd lot offers is set out in Part XII.

Shares issued to sponsoring brokers and advisers in lieu of fees

162. Where an issuer issues shares to its sponsoring broker or to its advisers in lieu of fees, such shares must be issued in compliance with this section. For new listings, such shares of the issuer must be held in trust by the issuer’s auditors or legal practitioners and may not be disposed of within two years from the date of listing.

PART VII – Pre-listing Statements

Requirement for pre-listing statement

163. When an issuer applies for listing of its securities it must publish a pre-listing statement containing the particulars referred to in this Part.

Responsibility for pre-listing statement

164. (1) The pre-listing statement must include a statement in the form set out in section 193 (responsibility statement) which may be modified in terms of subsections (2) or (3) or in such other manner as may be permitted by the ZSE.

(2) If the pre-listing statement relates to securities issued in connection with a recommended take-over of the listed company and the directors of the other company accept responsibility for the information given on that company in the pre-listing statement, then the directors of the applicant may accept responsibility only for the rest of the information in the pre-listing statement and the responsibility statement must be modified accordingly.

(3) The ZSE may require responsibility to be extended to additional persons who have made specific statements in, or who have made contributions to, the pre-listing statement, in which case the statement must be modified accordingly.

(4) The pre-listing statement must be signed by every director of the applicant or by his or her agent or legal practitioner, and a copy of the authority of any such agent or legal practitioner must be submitted with the pre-listing statement. Where responsibility for any information contained in different parts of the pre-listing statement has been extended to or accepted by any other person in accordance with section 218 (experts consents), such other person or his or her agent or legal practitioner must also sign the pre-listing statement and it must be stated clearly for which part or parts of the pre-listing statement each signatory bears responsibility.

Requirement for pre-listing statement

Form and content of pre-listing statements

165. (1) Pre-listing statements must contain—

  • (a) the information prescribed in Part VIII (listing particulars) according to the nature and circumstances of the applicant and the type of security as specified in this Part; and
  • (b) such additional information as the ZSE may consider investors and their professional advisers will reasonably require for the purposes of making an informed assessment of the prospects and status of the applicant. If the ZSE requires additional disclosure it will inform the applicant accordingly within seven business days in writing.

(2) Pre-listing statements must provide factual information in words and figures and in a form that, as far as possible, is comprehensible and easy to analyse.

(3) The ZSE may require that prominence be given in the pre-listing statement to important information in such manner as it considers appropriate.

(4) In the case of pre-listing statements published by a new applicant, the following information must appear on the first page together with the names of the issuer, sponsoring brokers, bankers, auditors, reporting accountants, financial advisers, legal practitioners and any other specialist advisers—

  • (a) share capital;
  • (b) Responsibility statement;
  • (c) particulars of the issue;
  • (d) registration by the Registrar of Companies.

(5) Pre-listing statements should not contain pictures, charts, graphs or other illustrations unless the ZSE is satisfied that this is the only way in which the information can be clearly presented.

(6) Where the information required by a particular section is inappropriate to the applicant’s sphere of activity or legal nature, the information must, subject to section 169 (exclusion of information), be appropriately adapted so that equivalent information is given.

(7) Possible risks to the issuer are required in all instances except where the ZSE advises otherwise.

(8) Unless specified, all references to disclosure are as at the date the pre-listing statement is issued or as near to such date as practicable.

(9) Where another company is to become part of an applicant’s group, that other company and its subsidiaries must be treated as part of the applicant’s group for the purpose of the information required by this section.

(10) The ZSE will not require an indebtedness statement to be included in a pre-listing statement published in connection with an issue of securities where the issuer’s business is entirely or mainly that of banking, insurance or the provision of similar financial services, provided the ZSE is satisfied that—

  • (a) the inclusion of such a statement would not provide significant information for investors; and
  • (b) the applicant’s solvency and capital adequacy are suitably regulated by another regulatory body.

Requirement for pre-listing statement

Shareholder approval

166. If the issue of securities in respect of which the pre-listing statement is to be issued is made conditional upon shareholder approval, the following statement must appear on the first page of the pre-listing statement— “This pre-listing statement has been prepared on the assumption that the ordinary and special resolutions proposed in the Notice of General Meeting forming part of the circular to which the pre-listing statement is attached will be passed at the General Meeting of shareholders to be held on …… and registered (if applicable).”.

Formal approval for publication

167. (1) Pre-listing statements must be approved by the ZSE before publication. Such approval will only be given if the ZSE considers that the information in the pre-listing statement is complete.

(2) Pre-listing statements submitted to the ZSE for approval must be in the form of a typed document, but the ZSE may permit manuscript information relating to the number of securities and the price, and any figures derived from them, when these items are not settled until a later stage.

Supplementary pre-listing statements

168. (1) The applicant must notify the ZSE of the need to publish a supplementary pre-listing statement, which it should publish at any time after pre-listing statements have been published and in any case, 72 hours before dealings in the relevant securities commence if circumstances warranting any changes arise.

(2) In the event that it is not possible to issue the supplementary pre-listing statement 72 hours before dealings commence, ZSE will declare the commencement of dealings postponed to a date approved by the ZSE.

(3) Supplementary pre-listing statements must—

  • (a) give details of any change or new matter; and
  • (b) contain a statement that, save as disclosed, there has been no significant change and no significant new matter has arisen since publication of the previous particulars; and
  • (c) contain a statement that a copy of the supplementary listing particulars has been delivered to the Registrar of Companies, if applicable.

Exclusion of information

169. (1) If any information required by section 165 (form and content of prelisting statement) is not applicable and no equivalent information is available, the ZSE must be informed in writing and approval of such exclusion obtained.

(2) The ZSE may authorise the variation of information which is applicable if it satisfied that—

  • (a) the information is of minor importance only and is not such as will influence assessment of the assets and liabilities, financial position, profits and losses and prospects of the applicant;
  • (b) disclosure would be seriously detrimental to the applicant or would constitute an invasion of the applicant’s right to privacy, and non-inclusion is not likely to mislead investors with regard to facts and circumstances, the knowledge of which is essential for the assessment of the securities in question.

(3) Requests to the ZSE to authorise any exclusion of information must—

  • (a) be made in writing by the applicant or by the applicant’s sponsoring broker; or
  • (b) identify the information concerned and the reasons for the non-inclusion; and
  • (c) state why, in the opinion of the applicant, one or more of the grounds in this subsection (2) applies.

Exclusion of significant contract from disclosure

170. Full disclosure of a significant contract is required, but the ZSE may allow all or part of such a contract to be withheld from public inspection upon request made in writing by the applicant or by the applicant’s sponsoring broker—

  • (a) stating why, in the opinion of the applicant, one or more of the grounds in section 169(3) applies; and
  • (b) enclosing a copy of the contract concerned and an outline of its terms; and
  • (c) including a confirmation by the applicant that the contract is a significant contract.

Issues not requiring pre-listing statements

171. (1) Pre-listing statements are not required for issues of securities by an applicant whose securities are already listed and fall into the following categories—

  • (a) securities resulting from the conversion of convertible securities;
  • (b) securities resulting from the exercise of rights under options;
  • (c) securities issued in place of securities already listed, provided that there is no increase in the nominal value of the share capital as a result;
  • (d) securities allotted to employees, if securities of the same class are already listed;
  • (e) issues relating to the extension of a business contemplated by and previously described in a pre-listing statement in respect of which the requirement to issue a pre-listing statement may be waived or the requirements reduced at the discretion of the ZSE;
  • (f) securities resulting from capitalisation issues; or
  • (g) issues of securities, including rights issues, which, together with any securities of the same class issued in the previous 3 months, would increase the securities issued by less than 30 per centum.

For this purpose a series of issues in connection with a single transaction, or series of transactions that is regarded by the ZSE as a single transaction, will be deemed to be a single issue.

(2) In cases where pre-listing statements are not required under paragraphs (a) to (f) of subsection (1), the following information must be published by way of a press announcement—

  • (a) where the issue would increase the securities of the relevant class by 30 per centum or more, the names and addresses of directors, directors’ responsibility statement and pro-forma financial statements;
  • (b) where the issue would increase the securities of the relevant class by less than 30 per centum but more than 10 per centum, the number and type of securities to be admitted and the circumstances of their issue.

(3) In cases where a pre-listing statement is not required under subsection (1) the ZSE may require the applicant to publish further information which the ZSE considers investors and their professional advisers may reasonably need in order to make an informed assessment of the applicant’s prospects and status.

(4) Information required under subsection (1) must be published by way of a press announcement and, if the ZSE so requires, by way of a circular to shareholders.

Acquisition and merger issues

172. In relation to an acquisition or merger where the consideration for a purchase of assets is regulated by Part X(transactions), or where the consideration being offered consists of securities for which listing will be sought, the ZSE may require pre-listing statements as described in section 173 and Part X. Pre-listing statements may be necessary either as a result of the original terms of the offer or as a result of a revision of the terms during the course of an offer. Where pre-listing statements have already been published and the offer is revised, the ZSE may require supplementary pre-listing statements as provided in section 174.

Requirements of pre-listing statements regarding acquisition and merger issues

173. Pre-listing statements issued in accordance with section 172 must comply with the relevant requirements of this Part subject to the following—

  • (a) references in Part VIII (listing particulars) to the applicant’s group will not, except as required by paragraphs (b) and (c), include the offeree company and its subsidiaries unless it has become a member of the applicant’s group by the time the pre-listing statements are published; and
  • (b) the information regarding major shareholders, major interests in securities and directors’ interests in securities must be given in relation to the applicant’s share capital both as existing and as enlarged by the securities for which listing is sought; and
  • (c) if the offer—
  • (i) is recommended by the board of the offeree company at the time of the publication of an offer document, the applicant must publish a statement as to the adequacy of working capital and details of material loans on the basis that the acquisition has taken place;
  • (ii) has not been recommended by the board of the offeree at the time of the publication of an offer document, the applicant must publish its own statement as to the adequacy of working capital and details of material loans, but the ZSE will allow the statement as to the adequacy of working capital and details of material loans on the combined basis to be given later, in a circular or supplementary pre-listing statement which must be published, in the absence of exceptional circumstances, within 28 calendar days after the offer is declared wholly unconditional.

In the latter case, the pre-listing statement must state that the statements on a combined basis will be available within 48 hours, and the applicant must make them available within that time.

Publication and distribution of pre-listing statements to shareholders

174. Pre-listing statements or supplementary pre-listing statements must be published in full or in an abridged form in accordance with Part XII (circulars, prelisting statements, and prospectus and press statements) and distributed to all shareholders in accordance with Part IV (continuing obligations).

Where pre-listing statements are revised or supplementary pre-listing statements are prepared they should ordinarily be published and circulated to shareholders at the time of despatch of the revised offer document. In a proper case the ZSE may permit pre-listing statements to be published and circulated after the despatch of the revised offer documents but before listing is granted.

New applicants and issuers not issuing prospectus

175. (1) New applicants not issuing a prospectus are required to provide the following information in the pre-listing statement—

  • (a) directors, managers and advisers; and
  • (b) securities for which application is being made; and
  • (c) group’s activities in terms; and
  • (d) financial information.

(2) Existing listed companies not issuing a prospectus are required to provide all the information in Part VIII in the pre-listing statement except information provided for in terms of—

  • (a) sections 210 and 211(1) and (4);
  • (b) section 219(1) (a) and (j);
  • (c) section 240(1).

PART VIII – Sub-Part A: Listing Particulars

Applicant’s name, address and business

176. The applicant must disclose—

  • (a) name of the applicant and addresses of the registered office; and
  • (b) the details of the transfer office, the applicant’s date and place of incorporation; or
  • (c) if an external applicant, proof of incorporation and the date of registration in Zimbabwe;
  • (d) if the applicant is a subsidiary, the name and address of the registered office of its parent;
  • (e) if the applicant has changed its name within the last three years the old name must be disclosed alongside the existing name on the first page; and
  • (f) brief description of the applicant’s business.

Share capital

177. (1) If the applicant’s share capital consists of shares of par value it must disclose—

  • (a) the authorised and issued, or agreed to be issued, share capital detailing—
  • (i) the classes of shares; and
  • (ii) the number of shares in each class; and
  • (iii) the nominal value of each class; and
  • (iv) the amount paid up for each class; and
  • (b) any share premium.

(2) If the applicant’s share capital consists of shares of no par value it must disclose—

  • (a) the stated capital; and
  • (b) the number of shares issued and held in reserve; and
  • (c) the classes of shares.

(3) Applicant must disclose the description of the respective—

  • (a) preferential, conversion and exchange rights;
  • (b) voting rights; and
  • (c) rights to dividends, profits or capital or any other rights of each class, including redemption rights and rights on liquidation or distribution of capital assets.
  • (4) Applicant must disclose information regarding the consents necessary for the variation of rights attaching to securities.

(5) A summary of any issues or offers of securities of the applicant and its subsidiaries during the preceding three years must be disclosed, including—

  • (a) the prices and terms at which such securities were issued or offered;
  • (b) by whom any such offers were so made;
  • (c) the number of securities allotted in pursuance of the issues and offers;
  • (d) whether the securities were issued to all shareholders in proportion to their shareholdings or, if not, to whom they were issued, the reasons why the securities were not so issued and the basis of allotment;
  • (e) the dates of the issues or offers;
  • (f) the reasons for any premium or discount on the issue or offer, how any premium was dealt with and, if some securities were issued or offered at a premium and others at par or a lower premium, the reasons for the differential;
  • (g) the value of the asset, if any, acquired or to be acquired out of the proceeds of the issue or offer, together with such further detail as required by the Companies Act [Chapter 24:03]; and
  • (h) details of any share repurchases, i.e. the number of shares purchased and the average share price.

(6) The applicant must disclose a ––

  • (a) summary of any consolidations or sub-divisions of the shares during the preceding three years or such lesser period as the company has been trading, together with details of commissions and underwriting costs as required by the Fourth Schedule to the Companies Act [Chapter 24:03];
  • (b) statement as to who controls the issue or disposal of the authorised but unissued securities, that is, the directors or the shareholders in general meeting;
  • (c) statement as to what other classes of securities are listed and on which securities exchanges.

Borrowing powers

178. (1) The requirement for trust deeds in respect of debentures as set out in the Fifteenth Schedule must be complied with. With regard to borrowing, the applicant shall also be obliged to disclose the borrowing powers of the applicant and its subsidiaries exercisable by the directors and the manner in which such borrowing powers may be varied.

(2) The following information should be disclosed—

  • (a) if the borrowing powers have been exceeded during the past three years, a description of the circumstances in which they were exceeded;
  • (b) any exchange control or other restrictions on the borrowing powers of the applicant or any of its subsidiaries;
  • (c) the amount of debentures created in terms of the trust deed and the amount issued or agreed to be issued;
  • (d) details of material loans, including debentures, to the applicant and to any of its subsidiaries, stating—
  • (i) whether such loans are secured or unsecured and details of the security, if any;
  • (ii) the names of the lenders, if they are not debenture holders;
  • (iii) the amount, terms and conditions of repayment or renewal;
  • (iv) the rates of interest on each loan;
  • (v) details of conversion rights; and
  • (vi) where the applicant or any of its subsidiaries have debts which are repayable within 12 months from the date of the application, a statement of how the payments must be financed.

(3) In addition to the requirements stated in subsection (1), the applicant must disclose­––

  • (a) particulars relating to debentures, or debenture stock issued by way of conversion or replacement of debentures or debenture stock previously issued, stating all material differences between the security for the old stock and the security for the new stock, or (if such be the case) a statement that the security for the new stock is identical with the security for the old stock;
  • (b) details of all material commitments, lease payments and contingent liabilities;
  • (c) details of all off-balance-sheet financing by the applicant and any of its subsidiaries; and
  • (d) how the borrowings required to be disclosed by subsection 2(d) arose, stating whether they arose from the purchase of assets by the applicant or any of its subsidiaries. If no loan capital is outstanding, this fact must be stated.

Loans receivable

179. The applicant is required to disclose––

  • (a) details of material loans by the applicant or by any of its subsidiaries, stating—
  • (i) the date of the loan;
  • (ii) to whom the loan was made;
  • (iii) interest and repayment terms;
  • (iv) if the interest is in arrears, the last date on which it was paid and the extent of the arrears;
  • (v) the period of the loan;
  • (vi) the nature of security held;
  • (vii) the value of such security and the method of valuation;
  • (viii) if the loan is unsecured, the reasons for the lack of security; and
  • (ix) if the loan was made to another company, the names and addresses of the directors of such company;
  • (b) details as described in subparagraph (a) of loans made or security furnished by the applicant or by any of its subsidiaries made for the benefit of any director or manager or any associate of any director or manager;
  • (c) explanation of how the loans receivable arose, stating whether they arose from the sale of assets by the applicant or any of its subsidiaries.

Options or preferential rights in respect of securities

180. (1) Disclosure from the applicant shall be required of ––

  • (a) the substance of any contract or arrangement, or proposed contract or arrangement, whereby any option or preferential right of any kind was or is proposed to be given to any person to subscribe for any securities of the applicant or any of its subsidiaries, giving the number and description of any such securities, including, in regard to the option or right, particulars of—
  • (i) the period for which it is exercisable;
  • (ii) the price to be paid for securities subscribed for under it;
  • (iii) the consideration given or to be given for it;
  • (iv) the names and addresses of the persons to whom it was given, other than existing shareholders as such or to employees under a bona fide staff option scheme;
  • (v) if given to existing shareholders as such, material particulars thereof; and
  • (vi) any other significant fact or circumstances concerning the granting of such option or right.
  • (2) For the purpose of subsection (1) subscribing for securities includes acquiring them from a person to whom they were allotted or were agreed to be allotted with a view to that person offering them for sale.

Controlling shareholders

181. With regard to controlling shares disclosure must include––

  • (a) the names of the controlling shareholder(s) so far as they are known to the directors of the applicant, or a statement that there are no such shareholders or that their names are not known;
  • (b) details of any change in controlling shareholder(s) as a result of the issue.

Major shareholders

182. In so far as is known to the applicant, the name of any shareholder, other than a director, who is directly or indirectly beneficially interested in 5 per centum or more of any class of the applicant’s capital, together with the amount of each such shareholder’s interest or, if there are no such shareholders, a statement of that fact must be disclosed.

Directors, managers and advisers

183. The following sections detail the disclosure requirements relating to directors, managers and advisers.

Directors and management

184. (1) Directors, managers and advisors are required to disclose––

  • (a) the full name (and, if relevant, any former name), business address and function in the group of each of the following persons, and an indication of the principal activities performed by them outside the group, where these are significant with respect to the group—
  • (i) directors of the applicant and its subsidiaries
  • (ii) partners with unlimited liability, in the case of a limited partnership with share capital;
  • (iii) founders, if the applicant has been established for fewer than five years; and
  • (iv) in the case of a new applicant and its subsidiaries, any senior manager who is relevant to establishing that the requirements of section 78 have been met.
  • (b) in the case of each person described in this section details of that person’s relevant management expertise and experience and the following information—
  • (i) full names (specifying the chairperson, chief executive officer and managing director, if any);
  • (ii) occupations;
  • (iii) business addresses;
  • (iv) nationalities;
  • (v) the names of all companies and partnerships of which such person has been a director or partner at any time in the previous five years, indicating whether or not the person is still a director or partner. It is not necessary to list all the subsidiaries of the applicant of which the person is also a director;
  • (vi) if the person, whether in Zimbabwe or elsewhere, has at any time been declared insolvent or bankrupt or has assigned his or her estate for the benefit of creditors, details of every such occasion;
  • (vii) if any company of which the person was a director, whether in Zimbabwe or elsewhere—

A. was wound up at the instance of creditors, whether compulsorily or voluntarily;

B. was placed under corporate rescue; or

C. entered into a composition or arrangement with its creditors generally or any class of its creditors;

while the person was a director or within 12 months after he or she ceased to be a director, details of the event or occurrence;

  • (viii) if any partnership of which the person was a partner, whether in Zimbabwe or elsewhere, underwent any event or occurrence referred to in paragraph (b) (vi) or (vii) while the person was a partner or within 12 months after he or she ceased to be a partner, details of the event or occurrence;
  • (ix) details of any public criticism of the person by any statutory or regulatory authority (including a recognised professional body) and whether the person has ever been disqualified by a court from acting as director of a company or from acting in the management or conduct of the affairs of any company; and
  • (x) in the case of a senior manager, any conviction of the person for an offence involving dishonesty, giving details of the offence and the sentence imposed on the person.
  • (c) details of the information contained in the director’s declaration as set out in Twenty-first Schedule of these rules;
  • (d) in the case of a foreign applicant, information equivalent to that described above, in relation to its Zimbabwean executive management, if any;
  • (e) the term of office for which any director has been or is to be appointed, the manner in and terms on which any proposed director will be appointed and particulars of any right held by any person relating to the appointment of any director;
  • (f) the provisions of the articles of association or other corresponding document of the applicant and each of its subsidiaries (or an accurate summary of those provisions) with regard to—
  • (i) the qualifications of directors;
  • (ii) the remuneration of directors; and
  • (iii) any power enabling the directors to vote on remuneration to themselves or any members