An assessment of the regulatory philosophy of the securities and exchange commission of Zimbabwe (2009-2014)

Abstract

The growing need for both local and foreign funds can be satisfied by a robust and well functioning securities market. It is imperative for any country to design and implement an effective regulatory system that ensures compliance, development of the market and protection of investors. The capital market in Zimbabwe has been characterized by resistance and conflict whilst companies continue to close under new regulation ushered by the Securities and Exchange Commission (SECZ). The purpose of the research is to gain insight into the realities of regulation being implemented by the SECZ. The research identifies the factors that influence SECZ’s regulatory approach, characterizes its enforcement style, examines whether SECZ is rules based or principles based and assesses how SECZ cooperates with the market. The study used a qualitative approach which was centered on the case study of SECZ. The study was premised on the proposition that the SECZ regulatory approach promotes market development and provides a safe environment for investor protection. The proposition was examined by exploring the regulatory actions of SECZ. The study identified the factors that influence the SECZ regulatory approach as its independence, the nature of the market, founding laws, regulatory resources and personalities of its employees. The study found that SECZ employed a legalistic command and control style to regulation that relied heavily on rules and operated under a pure government model as there was little cooperation with the market players. The study revealed that the SECZ approach to regulation was partially effective given the market realities, social and economic conditions. The study recommends that SECZ should be more flexible with market players; move towards principles based regulation and share its regulatory roles with the market players.