Maravi

Securities Act doesn't allow creation of exchange market, says Liweley

Securities Act doesn't allow creation of exchange market, says Liweley
By Chiwoyu Sinyangwe
Friday May 02, 2008 [04:00]

SECURITIES and Exchange Commission (SEC) director for licensing and enforcement Michael Liweleya has said the current securities Act does not allow for creation of a commodity exchange market. Liweleya was commenting on reports that Zambia Agricultural Commodities Exchange (ZAMACE) had approached SEC with a view to forming a commodity exchange market which was expected to operate along the same line as Lusaka Stock Exchange (LuSE). He also confirmed that SEC had received an official application from the promoters of the commodity exchange market.

“We received a written application from ZAMACE over their intentions to set up a commodity exchange market but our view is that the current securities Act only empowers SEC to regulate securities and not commodities,” he said.

Liweleya also said for SEC to start providing for provision for establishment of commodity stock market, the securities Act needed to be amended.

He disclosed that the government had since endorsed the position that SEC in the current setup did not have a legal mandate to regulate commodity exchange market.

“After making our assessment and position on the matter, we wrote to the Attorney General to seek further guidance on the matter and yesterday (Monday) they wrote back to us and they also confirmed position that unless there is an amendment to the current securities Act, we cannot licence for a commodity exchange market,” said Liweleya.

The commodity exchanges are the associations with public corporation established to handle the purchase and sales of goods quoted in the commodity exchange market and to determine, register and declare prices of those goods in the market.”

It operates on the same principles like stock exchanges where the bonds are exchanged but the only fundamental difference between the two is that the commodity exchange market deals with agricultural goods.

Currently, ZAMACE is the country’s sole agriculture commodity market with a stronger commercial focus and links to regional commodity exchange.

Labels: COMMODITIES, LUSE, SEC, ZAMACE

posted by MrK @ 5:51 AM