Directive on Fungibility Inflows - Additional KYC Requirements

DIRECTIVE NUMBER: SS12/03/2020
DIRECTIVE TO ALL SECURITIES MARKET INTERMEDIARIES ON ADDITIONAL REQUIREMENTS ON FUNGIBLE SHARES FROM EXTERNAL REGISTERS INTO ZIMBABWE The Securities & Exchange Commission of Zimbabwe (SECZ) hereby issues this directive SS 12/03/2020, in terms of the FIRST SCHEDULE, paragraph 21 of the Securities and Exchange Act [Chapter 24: 25]. The Directive seeks to prescribe additional Know Your Customer (KYC) and Enhanced Due Diligence requirements on the handling and transfer of fungible shares from external registers into Zimbabwe. The directive may be reviewed from time to time. All Securities Market Intermediaries (SMIs) are directed as follows:
i. All Securities market intermediaries should, with immediate effect, undertake Enhanced
Due Diligence on all inflows into the Zimbabwean share registers from external registers. Securities market intermediaries receiving reference numbers from external Securities dealers/ Stockbrokers or capital market players should request for all Customer Due Diligence (CDD)documents immediately upon receipt of that notification. The CDD information include, amongst others:

• Basic KYC information on clients,
• Information on beneficial ownership, and
• Declaration and proof of source of funds/ net worth
  ii. If the above information is not disclosed, the SMIs should not facilitate registration of such
  shares into the local register and must file Suspicious transaction reports with the relevant authorities. Please note that these KYC documents will form part of the documents that will be required to be submitted to the local Securities Exchange to facilitate the registration on that bourse, and no registration will be done unless these are submitted.
  iii. All rejected transfer requests must be reported to the Securities Exchange and the
  Securities & Exchange Commission of Zimbabwe (SECZ) simultaneously.

Please further take notice that SECZ shall immediately undertake an audit of all transaction inflows on the dual listed shares that were consummated with effect from 01 June 2019. All suspicious transactions shall be flagged and dealt with in terms of the relevant laws, particularly the Money Laundering and Proceeds of Crime Act [Chapter 9:24] and the Securities and Exchange Act (Chapter 24:25). We request that every documentation required to comply with Exchange Control Directive RU102/2019 should be in place on all the transactions from the mentioned period. For and on behalf of the Securities and Exchange Commission of Zimbabwe Tafadzwa Chinamo Chief Executive Officer 12 March 2020