Securities and Exchange Commission Zambia 2020 Annual Report

SECURITIES AND EXCHANGE COMMISSION ZAMBIA Annual Report 2020

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3 Securities and Exchange Commission Corporate Office Address: Plot 3827Parliament Road Olympia P.O. Box 35165 Lusaka ZAMBIA (0211) 227012/222368/222369/226386 Fax: (0211) 225443 info@seczambia.org.zm Website: www.seczambia.org.zm

4 Table of Contents Contents About SEC.........................................................................................................................................................7 SEC Commissioners..........................................................................................................................................9 SEC Management........................................................................................................................................... 12 Chairman’s Review .........................................................................................................................................17 Chief Executive’s Statement.........................................................................................................................20 Performance of the equities market........................................................................................................ 21 Equity market......................................................................................................................................... 21 Market Capitalisation ............................................................................................................................22 Turnover.................................................................................................................................................23 Volume of shares and number of trades..............................................................................................23 Number of Listed and Quoted Companies...........................................................................................23 Turnover to Market Cap Ratio ..............................................................................................................23 Trading Turnover (Government Debt Securities)................................................................................23 Corporate Bonds....................................................................................................................................23 Collective Investment Schemes (CISs).................................................................................................24 Financial Performance of the Commission..............................................................................................24 Reserves.................................................................................................................................................24 Income Earned.......................................................................................................................................25 Commission Expenses ...........................................................................................................................25 Capital Expenditure ...............................................................................................................................25 Staff Complement and staff matters.......................................................................................................25 Training and Workshops........................................................................................................................... 28 Corporate Governance ..................................................................................................................................29 Board Composition ................................................................................................................................... 30 Board Meetings.......................................................................................................................................... 31 Committees and Committee Membership ...............................................................................................32 Audit Function........................................................................................................................................... 34 Commission Secretary ...............................................................................................................................35 Board Performance Self-Evaluation..........................................................................................................35 Overall Assessment of Board Performance in 2020 ............................................................................36 Report on regulatory and operational efficiency .......................................................................................43 Extent of implementation of the Commission’s oversight function and their effectiveness .............. 43 Cost Savings resulting from the Commission’s Operations.................................................................... 44 Cost to the Nation for not having the Commission ................................................................................ 44 Actual and Projected efficiencies the Commission has achieved as a result of the continuing regulatory activities .................................................................................................................................. 45 Nature of the working relations with Capital Market Operators........................................................... 46

5 Immediate and Projected capabilities of the Commission ..................................................................... 46 Operational Activities.....................................................................................................................................47 MARKET SUPERVISION .............................................................................................................................47 Licensing ............................................................................................................................................... 48 Inspections............................................................................................................................................ 49 Issuers........................................................................................................................................................ 50 Collective Investment Schemes ............................................................................................................... 50 Complaints.................................................................................................................................................. 51 MARKET DEVELOPMENT ..........................................................................................................................52 Financial Sector Deepening Africa / Zambia Partnership.........................................................................53 Toronto Centre Partnership: Long-Term Engagement for Capacity Building (Risk Based Supervision and Gender-Technology-Financial Inclusion Supervision Project)......................................................... 54 Partnership with the United Nations Capital Development Fund (UNCDF)...........................................55 Partnership with the United Nations Biodiversity Finance Initiative (BIOFIN) ..................................... 56 Capacity Building | National Financial Inclusion | Awareness | Education...............................................57 National Strategy on Financial Education Phase II 2019 – 2024 (NSFE II)...............................................57 Cha-Ching Financial Education Programme..............................................................................................57 Commemoration of the 2020 Financial Literacy Week (FLW)................................................................ 58 Validation of the Ministry of Education School Curricula for Financial Education ................................ 58 Financial Sector Joint Messaging Campaign (FSJMC) ............................................................................ 58 World Investor Week 2020....................................................................................................................... 59 National Financial Inclusion Strategy....................................................................................................... 60 Capacity building........................................................................................................................................61 Recognition of the Capital Markets Association of Zambia as a Self-Regulatory Organisation........... 62 ENFORCEMENT AND LEGAL SERVICES ................................................................................................... 63 DELS Functions ..................................................................................................................................... 63 Law Reform and stakeholder engagements....................................................................................... 64 The Capital Markets Tribunal ............................................................................................................... 65 Enforcement and legal actions taken.................................................................................................. 66 Compliance with regulatory requirements and international best practice..................................... 67 Cooperation with other financial players and stakeholders’ regulators........................................... 68 MARKET TRANSACTIONS......................................................................................................................... 68 Appendix I................................................................................................................................................. 96 The SEC Staff in 2020 ................................................................................................................................ 96 Appendix II................................................................................................................................................ 98 List of Authorised Capital Market Players as at 31st December, 2020................................................... 98 Dealer’s Licenses .................................................................................................................................. 98 Dealer’s Representative Licenses........................................................................................................ 98

6 Investment Adviser’s License .............................................................................................................102 Investment Adviser’s Representative License...................................................................................102 Securities Exchange Licenses..............................................................................................................103 Appendix III..............................................................................................................................................104 Contact Details of Capital Market Players.............................................................................................104 Securities Exchanges contact details .................................................................................................104 Dealers’ Contact Details ......................................................................................................................104 Investment Advisors’ Contact Details ................................................................................................109 Self Regulatory Organisations .............................................................................................................110 Listed Companies’ contact details....................................................................................................... 111 Quoted Companies’ Contact Details....................................................................................................115 Details of Companies with Listed Debt Securities ..............................................................................117

7 About SEC Vision A dynamic Regulator that protects investors and promotes capital markets development Mission To safeguard interests of investors and promote the growth of capital markets Values The Commission depends on the following core values in the performance of its staff by which their conduct and behaviour is anchored: Transparency – We are open in the execution of our mandate Accountability – We take responsibility for our actions and decisions Confidentiality – We do not disclose privileged information to unauthorised persons Impartiality – We treat all our stakeholders fairly Team work – We are committed to pursuing our common goal while showing support and concern for each other Professionalism – We perform our duties with the highest level of dedication and competence Integrity – We exhibit strong moral standards and honesty in the execution of our duties Mandate The Securities and Exchange Commission (SEC) was established pursuant to section 3 of the repealed Securities Act, Cap 354 of the Laws of Zambia and its existence has been continued under the new Securities Act, No. 41 of 2016. The Commission’s mandate is to ensure that investors in the Zambian capital markets, both local and foreign, are protected. It is also the mandate of the Commission to develop the capital markets. The Commission has to ensure there is a right balance between investor protection and Capital Market Development. The principle function of the SEC is to regulate the capital markets so as to foster fair and efficient trading. The specific functions of the Commission as provided under section 9 of the Act are as follows: a) ensure compliance with the Act and regulations or rules made in accordance with the Act; b) license securities exchanges, regulate the activities of securities exchanges and the settlement of securities transactions;

8 c) license and regulate capital markets operators; d) license and regulate clearing and settlement agencies and other participants in the capital markets; e) license and regulate credit rating agencies and provide conditions for the issuing of credit ratings; f) approve the constitutions, charters, articles, by-laws and rules governing and pertaining to securities exchanges, clearing and settlement agencies and other participants in the capital markets; g) promote and encourage high standards of investor protection and integrity among members of securities exchanges, capital markets operators, clearing and settlement agencies, self-regulatory organisations and other participants in the capital markets; h) support the operation of a free, orderly, fair, secure and properly informed capital markets; i) regulate the manner and scope of securities transactions; j) regulate margin requirements, capital adequacy requirements, disclosure and reporting requirements and clearing and settlement requirements, as may be prescribed; k) take all reasonable steps to safeguard the interest of persons who invest in securities and guard against illegal and improper practices as provided in the Act; l) authorise the establishment of collective investment schemes and other schemes; m) regulate the activities of managers, trustees and custodians; n) authorise and regulate the establishment of venture capital funds; o) consider and suggest proposals for the reform of the Act and rules and regulations made in accordance with the Act; p) promote and develop a system of self-regulation by securities exchanges, clearing and settlement agencies, self-regulatory organisations, other participants in the capital markets and capital markets operators, as maybe prescribed; q) encourage the development of securities and securities exchanges and the increased use of such exchanges; r) provide, promote or otherwise support financial education, awareness and confidence with regard to financial products, institutions and services; s) prescribe certification standards and accreditation for licensees; t) co-operate with, provide assistance to, receive assistance from, and exchange information with other regulatory bodies and trade organisations in Zambia and elsewhere; and u) exercise and perform such other functions as may be conferred or imposed upon it by or in accordance with the Act or any other written law. IOSCO Core Objectives In exercising its statutory mandate, the Securities and Exchange Commission is guided by the following three core objectives of securities regulation set by the International Organisation of Securities Commissions (IOSCO):

• investor protection;
• ensuring markets are fair, efficient and transparent; and
• reduction of systemic risk.

9 SEC Commissioners During the period under review, the SEC Commissioners appointed from institutions specified in the Securities Act, No. 41 of 2016 were the following: Board Chairperson Mr. Amos Siwila Mr. Siwila, a legal practitioner, is the SEC Board Chairperson. He previously served as the SEC Board Vice-Chairperson from November 2015 to August 2016. He then served as Acting Chairperson from August 2016 until his election as Board Chairperson in June 2017. Mr. Siwila is a Partner in the law firm Mambwe Siwila and Lisimba Associates and he represents the Law Association of Zambia (LAZ) on the Board. Board Vice-Chairperson Mr. George Nonde Mr. Nonde, a chartered accountant, is the Board’s elected Vice￾Chairperson since June 2017 and has been a SEC Board Member since September 2014. He is the Finance Director for CFAO Zambia and Honorary Treasurer for Zambia Chamber of Commerce and Industry (ZACCI). He represents ZACCI on the Board and also chairs the Board’s Staff and Remuneration Committee. Commissioner Mrs. Ireen Musonda-Habasimbi Mrs. Habasimbi, an economist, had been a SEC Board Member since May 2017 until May 2020 when her term of office came to an end. Whilst on the Board, she served as the Director – Economic Management Department at the Ministry of Finance and she represented the Ministry of Finance on the Board. She chaired the Commission’s Licensing Committee.

10 Commissioner Mr. Mulele Maketo Mulele Mr. Mulele, an economist, modeler, statistician and planner has been in public service for a long time and served in various portfolios with integrity and diligence. He is currently serving as Director-Economic Management Department in the Ministry of Finance since February 2020. He has also served as Director￾Development Planning at the Ministry of National Development Planning from 2017 to 2020, as well as Director-Economic Policy at Cabinet Office. Having taken over from Mrs. Habasimbi as Director – Economic Management Department at the Ministry of Finance (MOF) on transfer from Ministry of National Development Planning, Mr. Mulele has been a SEC Board Member since May, 2020 representing the interest of the Ministry of Finance and Government at large. Considering his vast work and professional experience from both development planning and economic management as well as policy analysis, he brings with him a wealth of knowledge to the SEC Board required in providing direction towards the development of the capital markets under the jurisdiction of SEC. Commissioner Dr. Jonathan Chipili Dr. Chipili, an economist at the Bank of Zambia (BoZ), has been a SEC Board Member since August 2012. Dr. Chipili is the Director of Economics at BoZ and represents the Central Bank on the Board. He chairs the Market Transactions Committee of the Board. Ms. Mainza Masole Ms. Masole, a social security professional, has been a SEC Board Member since May 2017. Ms. Masole is the Prudential Supervision Manager – Pensions at the Pensions and Insurance Authority and she represents the Pensions and Insurance Authority on the Board. She chairs the Commission’s Property Acquisition and Development Committee.

11 Commissioner Commissioner Mrs. Natasha N. Kalimukwa Mrs. Kalimukwa, a legal practitioner, has been a SEC Board Member since March 2018. Mrs. Kalimukwa is the Administrator General and Official Receiver for the Republic of Zambia and she represents the Ministry of Justice on the Board. She also chairs the Commission’s Compensation Fund Committee. Commissioner Mrs. Ruth Mugala Mrs. Ruth Simwanza Mugala is a seasoned Accountant and business consultant who brings to the Board a wealth of knowledge and experience in the financial and advisory fields gained in the public and private sectors with a career spanning over 35 years. Mrs. Mugala has served in the Accounting profession in various capacities as Chief Accountant, Finance Manager, Financial Controller and Manager Accounting services in Zambia and in Canada and at the highest level having held the position of Acting General Manager at Zambia Emerald Industries Limited. She is a holder of a Bachelor degree in Accountancy and holder of the Association of Chartered Certified Accountants (ACCA) of UK and a Fellow of the Zambia Institute of Chartered Accountants (ZICA). She is currently Executive Director of Massy Capital Services and Massy Wellness Services and provides consultancy services in Accounting, Finance, Savings and Investments to SMEs and individuals. She sits on a number of boards in the private sector. Ex-officio Commissioner Mr. Phillip K. Chitalu Mr. Chitalu, a chartered accountant, is the Chief Executive Officer of the Commission and is an ex-officio Member of the Commission Board.

12 SEC Management During the period under review, the following were the Commission’s Management team: Chief Executive Officer Phillip K. Chitalu Mr. Chitalu, a chartered accountant, has been with the Commission since August 2011. He has a bachelor’s Degree of Accountancy from the Copperbelt University, a Fellow of the Association of Chartered and Certified Accountants (FCCA) and also Fellow of the Zambia Institute of Chartered Accountants (FZICA). Mr. Chitalu also holds a Master of Philosophy in Development Finance from Stellenbosch University, Cape Town, and further holds the International Global Certificate for Securities Regulators from the Harvard Law School/IOSCO. Commission Secretary and Director – Enforcement & Legal Services Diana Sichone Mrs. Sichone, a legal practitioner, has been with the Commission since July, 2014. She holds a Bachelor’s degree in law from the University of Zambia and a Masters degree in Corporate and Commercial law from the University of Lusaka. Mrs Sichone holds the International Global Certificate for Securities Regulators from the Harvard Law School/IOSCO. She is also an advocate of the High Court for Zambia, a qualified legislative drafter and trained commercial Arbitrator. Director - Market Supervision & Development Mutumboi Mundia Ms. Mundia, a fellow of the Association of Chartered Certified Accountants (ACCA), has been with the Commission since January 2013. She is a Chevening Scholar and holds a Master’s Degree in Corporate Strategy and Governance from the University of Nottingham in the UK. She also holds the International Global Certificate for Securities Regulators from the Harvard Law School/IOSCO. Ms Mundia further holds the Introductory Certificate in Arbitration from the UK’s Chartered Institute of Arbitrators.

13 Manager – Market Transactions & Investments Bruce Mulenga Mr. Mulenga has been with the Commission since February 2013. He holds a bachelor of Science in Accounting from Hull university and BTEC National Diploma in Business and Finance from City College of Higher Education. Manager – Finance Mateyo Lungu Mr. Lungu, a chartered accountant, has been with the Commission since December 2015. He is the holder of the Association of Chartered Certified Accountants (ACCA) qualification and the Certified Accounting Technician (CAT) from Chingola School of Accounts (ZAMIM-Chingola campus). He is a Fellow of the Association of Chartered Certified Accountants and an Associate member of the Zambian Institute of Chartered Accountants. Manager – Administration Saul Nyalugwe Mr. Nyalugwe has been with the Commission since October, 2012. He holds a bachelor of laws degree from Nelson Mandela Metropolitan University in South Africa, a Diploma in Purchasing and Supply from Sandwell College of Higher and Further Education (West Bromwich) UK and a Diploma in Human Resource Management from Zambia Institute of Human Resource Management. He also trained in Domestic Arbitration by the Chartered Institute of Arbitrators.

14 Manager – Market Supervision Abraham Alutuli Mr. Alutuli, a chartered accountant, has been with the Commission since May, 2014. He Holds a Master of Business Administration (MBA) and is a Fellow of both the Association of Chartered Certified Accountants (ACCA) and Zambia Institute of Chartered Accountants (ZICA). He is also a certified fraud examiner and holds a National Accounting Technician Certificate. Manager – Market Supervision Nonde Sichilima Mr. Sichilima, a chartered accountant, has been with the Commission since September, 2015. He holds a BA (Hons) Degree in Accounting and Finance from Athlone Institute of Technology, Ireland. He is a member of the Zambia Institute of Chartered Accountants and a Fellow of the Association of Chartered Certified Accountants (FCCA). Manager -Market Development Dingase Makumba Mrs. Makumba has been with the Commission since May 2014. She holds a Masters of Business Administration from the Eastern and Southern Africa Management Institute (ESAMI), Bachelor of Arts in social sciences from the University of Zambia and postgraduate diploma in marketing from the Chartered Institute of Marketing-UK

15 Manager – Financial Inclusion Mubanga Kondolo Mr. Kondolo, a financial sector specialist has been with the Commission since June 2017. He holds a BA (Hons) in Business and Management from University of Sunderland. Manager – Law Reform and Enforcement Lubunda A. Ngala Mr. Ngala, a legal practitioner, had been with the Commission from October 2017 to April 2020 when he left the Commission. He holds a Bachelor’s degree in law from the University of Zambia, and he is also an advocate of the High Court for Zambia and a qualified legislative drafter. Manager – Law Reform and Enforcement Veronica O. Sichone Mrs. Veronica O. Sichone, a legal practitioner, had been with the Commission from June 2018 to December 2020 when she left the Commission. She acted as Manager – Law Reform and Enforcement from May 2020 to December 2020. She holds a Bachelor’s degree in law from King’s College London and she is also an advocate of the High Court for Zambia and a qualified legislative drafter.

16 SEC Senior Management Team – From left to right: Ms Mutumboi Mundia, Mr. Phillip K. Chitalu and Mrs. Diana Sichone SEC Management Team Front row, from left to right: Nr. Nonde Sichilima, Mrs. Dingase Makumba, Mrs. Diana Sichone and Mr. Mubanga Kondolo Middle row, from left to right: Mr Lubunda Ngala, Mr. Abraham Alutuli. Mr. Saul Nyalugwe and Mr. Mateyo Lungu Back row, from left to right: Mr. Bruce Mulenga, Mr. Phillip K. Chitalu and Ms Mutumboi Mundia

17 Chairman’s Review I am happy, on behalf of the Commission, to present the 2020 annual report. This is a requirement by both the Securities Act, Number 41 of 2016 and the Public Finance Management Act, No. 1 of 2018. In line with the Securities Act, No. 41 of 2016, the Commission is required to report on several issues including, but not limited to, the following: a) The extent of the implementation of the Commission’s oversight functions and their effectiveness; b) Cost savings resulting from the Commission’s operations; c) The cost to the nation for not having the Commission; d) The nature of the working relations with capital market operators; e) The actual and projected efficiencies the Commission has achieved as a result of the continuing regulatory activities; and f) The immediate and projected capabilities of the Commission. The Commission has reported on these six areas in relevant sections of this annual report. In addition to these six areas, I am glad, on behalf of the Commission, to report on several exciting activities and projects embarked on in the year under review, all of which contributed to achieving our statutory mandate. In addition to the capital markets financial inclusion agenda, capital formation required for economic growth is an important objective of the Commission’s Strategic Plan. In this regard, the Commission, during the year, started working on several projects to assist with the mobilization of both local and foreign savings into specific economic areas. I am glad to report that to this end, the Green Bonds Project and the Sandbox Guidelines are some of the initiatives embarked on during the year. With the approval of the Green Bonds Guidelines, capital markets will assist in channeling funds into economically sustainable green projects and facilitate the raising of funding for power, reforestation exercises and water conservation, among other green projects, in the country. With respect to the Sandbox project, the Commission has seen the need to embrace innovation in the development of our markets. Therefore, the Sandbox will provide an opportunity to test innovative capital markets products in a less regulated, but controlled, environment. The

18 Commission strongly believes that to continue with the country’s job creation agenda, innovative SME funding models will be tested in the Sandbox regulatory environment. To ensure the market remained predictable and trusted as the Commission implements its 2018 - 2021 Strategic Plan as well as introduce new and exciting products, investor protection remains at the core of all our concerns. In this regard, the need to fully operationalize the 2016 Securities Act and thus ensure that the capital markets remain safe and trusted is a priority area for the Commission. The Commission has, in this respect, drafted 10 Rules and Regulations that are now undergoing Regulatory Impact Assessment (RIA) and a stakeholder consultative process before they are promulgated into law. In addition to working on the Rules and Regulations, the Commission during the year issued several Guidelines and Directives meant to make aspects of the Law operational as well as give guidance to the market. To demonstrate our resolve to improve investor protection through continued update of Laws, Rules, Regulations and Guidelines, the Commission had in 2019 given a Directive on the need to report to the Commission, as required by the Securities Act, all secondary market bond trades. This implementation of the Law has, in 2020, yielded positive results and going forward, the Commission will be publishing bond trading data which will make our capital markets more transparent, help with price formation and discovery and thus assist investors make informed investment decisions when investing in bonds. With a developed secondary bond market, we are positive that the GRZ primary market bond issuances will be more successful as there will be a transparent and liquid secondary market where primary issuances could be traded thus giving investors an easy exit option. In looking ahead and as previously reported on, the Commission in partnership with the Ministry of Finance and Financial Sector Deepening Africa (FSDA), which is a DfID funded project and is financier, are working on the development of the Capital Markets Master Plan scheduled to be finalized and launched in 2021. This plan, which is a comprehensive capital markets strategy paper, will anchor capital markets development in Zambia for the next 10 years. The Commission remains indebted to the role co-operating partners have played in facilitating capacity building for Commission staff. With regulatory bodies increasingly being faced with capacity constraints, the need to migrate from compliance based to risk-based supervision-n cannot be overemphasized. In this vein, the Commission is grateful for the role Toronto Centre has played in training Commission staff to implement the RBS in a three-year implementation plan starting in May 2019. In 2020, the project would focus on the development of the policy and other supervisory tools as well as pilot testing in the latter part of the year. With the full roll out of RBS scheduled for May 2021, the capital markets will be better supervised with supervision focused on the areas with the most risk in the market. While the Commission continued to deliver on its mandate of investor protection and market development, the key challenge continues to be the limitation in the availability of financial resources. This has impacted the Commission’s ability to provide an effective oversight role on the country’s capital markets. The Commission is however grateful on the continued support that government,through the Ministry of Finance, has given to the Commission by ensuring that the Securities Act is further enhanced, Regulations and Rules are enacted, and that the Commission had permanent and adequate office accommodation.

19 In conclusion, on behalf of the Board, management, and staff, the Commission continues to thank the Ministry of Finance, supporting partners and all capital market players for the cordial and supportive environment that has characterized capital markets. Amos Siwila CHAIRPERSON

20 Chief Executive’s Statement The Commission ended 2020 on a positive note despite several challenges experienced in the first and second quarters of the year. With subdued market activity which extended from Q4 of 2019, the Commission faced challenging cash flows in the first two quarters of the year. Further, covid-19 affected the Commission’s operational efficiencies with more than half of the staff being hospitalised or experiencing other covid-19 related effects. The performance for 2020 was however above the Commission’s projections as reported under the finance and other sections of this report. As a service organisation that exists to protect investors and develop the capital markets, and with human capital at the core of regulatory work, staff adapted well to the covid-19 challenges and embraced the work-from￾home situation with a continued innovative mindset that ensured the implementation of the Commission’s plans. The Commission has used the above challenges as an opportunity to craft survival strategies including the perfection of tools such as the online document management system, zoom meeting tools, time sheets, and other tools that have continued to help the Commission to supervise the capital markets whether working from home or the office. These tools helped minimise the impact of covid-19 on the Commission’s mandate to supervise the markets. Although the Commission saw its limited resources stretched to the limit, as explained above, the Commission continued to operate above expectations with prudent financial management and with the right tools mobilised and employees continuing to access resources from the comfort of their homes. While the Commission performed above expectations, the year under review experienced increased reports of ponzi scheme like cases with members of the public continuing to invest in very risky and unregulated products. These cases, appeared to increase with members of the public investing in such schemes like Heritage Coin of 2019, Kwakoo, Jaden Cash and Earn More. These incidents were investigated and the matters referred to relevant regulatory and enforcement agencies for appropriate action to be taken. The increasing number of these scams puts pressure on the Commission’s limited surveillance, supervision, and enforcement resources. This report, as required by the Securities Act Number 46 of 2016, gives an update on the Commission’s performance in 2020. While the Commission’s main mandate is to protect

21 investors in the capital markets and ensure that capital markets are developed, this is only possible in an environment where the limited financial and other resources are efficiently and effectively utilised. To this end, the Commission presents below financial statements for the year ended 31st December 2020. This is in line with both the requirements of the Public Finance Management Act and the Securities Act as well as good corporate governance principles. The Commission has continued to demonstrate that the financial resources of the Commission are continually managed in a prudent manner having in mind the Commission’s need to use resources in its primary function of investor protection and attending to market development goals. The Commission, as reported in previous years, however, continues to operate below the minimum required resource needs. Of concern, is the Commission’s continued lack of adequate funding which impacts other resource requirements such as staffing, office space, and ultimately the level and quality of supervisory and enforcement activities required to keep investors protected and good enough to bring confidence needed to grow the market. However, despite this challenge, the Commission applies the limited resources to those regulatory activities that add value to the protection of investors. The Commission therefore dedicated its resources to protect the K58 Billion invested through public markets on the Lusaka Securities Exchange Plc, the K900 Million in Collective Investment Schemes, and the K800 Million in Corporate Bonds. It is the Commission’s challenge to ensure that these funds are protected so that people’s savings are secure which is also a confidence building exercise needed for the growth of capital markets. The Commission now reports below the performance of the equity, corporate debt, and Collective Investment schemes (CIS) segments of the capital markets sector. These areas under the supervision of the Commission all contributed to the overall well-being of the financial sector in Zambia. Performance of the equities market Although the Capital markets in Zambia has two licensed securities exchanges, only one is functional. In addition, the Commission issued an exemption for the Central Bank to operate an electronic platform dedicated to the trading and settlement of GRZ secondary market bond trades. The Commission during the year continued to undertake supervisory actions on the Pan African Exchange (PANEX) whose license had been revoked in December 2019 and the Bonds and Derivatives Exchange (BaDEX) whose license was suspended. Thus, the two exchanges did not have any trading activity during 2020. Equity market The Lusaka All Share Index(‘‘LASI’’) declined by 8.25% on an annual basis from 4,264.51 basis points as of December 2019 to 4,564.78 basis points as at end of December 2020. The decline is attributed to a general decline in stock prices. In general terms, a portfolio holding all the constituent shares of the index lost 8.25% of their value between 31st December 2019 and 31st December 2020.

22 We present below the salient indicators of the performance of the market during the year under review:

31/12/2020 31/12/2019 percentage change LuSE All Share Index 3,912.33 4,264.51 8.26%↓ Market Cap (K ’million-Including Shoprite) 57,508 56,557 1.68%↑ Market Cap (US$ million-Including Shoprite) 2,714 4,017 32.43%↓ Market Cap (K ‘million-Excluding Shoprite) 23,269 22,316 4.27%↑ Market Cap (US$ million-Excluding Shoprite) 1,098 1,585 30.73%↓ *Gross Domestic Product (US$ million) 18,909 27,500 31.24%↓ Trading Turnover - Equities (K ‘million) 398 266 49.62%↑ Volume of Shares Traded (‘Millions’) 1,735 83 1990%↑ Number of Trades 4,215 4,467 5.64%↓ Number of Listed Companies 24 23 4.35%↑ Number of Quoted Companies 12 12 0.00 Market Capitalization/GDP Ratio 14 15 6.67%↓ †Turnover /Market cap Ratio 1.71 1.19 43.70%↑ Trading Turnover-GRZ Bonds (K ‘million) 9,890 5,886 68.03%↑ Number of Trades (GRZ Bonds) 1,172 2,148 45.44%↓ Number of Brokers 6 6 0% Number of Collective Investment Schemes 10 10 0% Source: Lusaka Securities Exchange Plc *2020 estimate GDP (IMF ) †Turnover to market cap ratio excludes Shoprite Boz selling rate @K21.19/US$ Market Capitalisation The Market Capitalization of all listed shares in Zambia at the end of December 2020, excluding Shoprite, was in kwacha terms ZMW 23,269 billion compared to ZMW 22,316 billion in 2019. This represents an increase of 4.27% and this increase in mainly attributed to increase in the number of listed companies from 22 to 23 companies. However, including Shoprite, the Market Capitalization closed at ZMW 57, 508 billion in 2020 compared to ZMW 56,557 billion in 2019

23 representing an increase of 1.68%. The increase is mainly attributed t0 the value associated with the listing of ZAFFICO and an increase in share prices of some counters. In USD terms, the Market Capitalization including shoprite was down 32.44% from USD 4 billion in 2019 to USD 2.7 billion in 2020. The reduction in market capitalization in USD terms is mainly a result of the depreciation in the exchange rate moving down by 50.49% from K14.08/Us$ as of December 2019 to K21.19 as of December 2020. Turnover The turnover level, which is the value of the volume of shares traded increased by 49% between 2019 and 2020 from ZMW 266 million ZMW 397 million. This increase is mainly attributed to the reasons indicated as contribution to the increase in the volume of shares traded. Volume of shares and number of trades The volume of shares traded increased by 1,982 %, from 83,348,249 in 2019 to 1,735,680,555 shares in 2020 while the number of trades for the same period declined from 4,215 trades to 4,467 trades, representing a 5.64% decline. The increase in the volume of shares traded was attributed to one stock, Copperbelt Energy Corporation Africa (“CECA”) which accounted for 91.2% of the total annual volume of 2020. The trades resulted from a corporate action where BP Investments of Nigeria, acquired a significant shareholding in CECA. Although CECA trades on the LuSE, its operating assets are in the Nigerian power sector. Number of Listed and Quoted Companies The number listed of companies remained at 23 companies with one new listing and one delisting. The number of quoted companies remained unchanged at 12. Zambia Forestry and Forest Industries Corporation Plc listed its shares on 12th February 2020 while Cavmont Capital Holdings Zambia Plc delisted its shares on 31st December 2020. Turnover to Market Cap Ratio The turnover to market capitalisation ratio increased by 43.70% to 1.71 in 2020 from 1.19 % recorded in 2019.The decline in market liquidity was as result of a decline in turnover recorded in the year. Trading Turnover (Government Debt Securities) The trading turnover of government bonds increased by 68.03% from ZMW 5,886 million in 2019 to ZMW9,890 million in 2020. Corporate Bonds The private sector participation in the capital markets is mainly through issuance of bonds to raise investment funds. However, as a percentage of GDP, corporate bonds outstanding was at 0.20% or at ZMW 789 Million on 31st December 2020 compared to 0.23% of GDP or at K621 Million at 31st December 2019. The 27% increase in the corporate bonds outstanding during the year is

24 mainly due to USD denominated bonds issued during the year and the foreign exchange effects which increased the value of bonds issued in USD when translated in kwacha terms due to the depreciation of the kwacha. while there was very minimal activity in new corporate bond issues. Collective Investment Schemes (CISs) The number of authorized CISs as at 31st December 2020 remained unchanged at 10 collective investment scheme. The assets under management increased from ZMW 634 million as at 31st December 2019 to ZMW 929 million as of 31st December 2020, representing a 46.60% increment. The increase in the growth of funds is attributed to increased deposits especially with smaller funds that had embarked on aggressive marketing to position themselves in the market. The depreciation of the kwacha also has some effect on the increase in funds as some funds are denominated in USD. Financial Performance of the Commission To safeguard savings made through the capital markets, government continued to support the Commission in meeting operational costs. The Commission also continued to support government efforts by generating revenues that support the Commission’s budget implementation. However, as the Commission’s mandate is largely investor protection, financial performance indicators are mainly on account of the Commission needing to prudently apply the limited resources in meeting its mandated objectives. We report in other sections on some of the non-financial activities that the SEC is required to do as part of its mandate. In the period ending 31st December 2020, the Commission recorded an operating surplus of K 6,975,357 (2019 – Deficit K7,440,548) from a combined income of K 29,328,647 against total operating costs of K 22,353,310. The Commission during the year met all its obligations on time by utilizing the available cashflows. The surplus in the year is mainly attributed to the bond trade commissions and the GRZ Grants which was fully funded together with the arrears that went to offset the PAYE. Reserves The Commission’s accumulated fund (reserves) position at 31st December 2020 stood at K 5,665,652 compared to K (1,309,685) recorded at 31st December 2019. This increase, as explained above, was due to the trade commission received from both the sell and buy side of the trade from the market the diagram below shows that since 2014, the Commission had been managing to contain costs and thus improve on its reserve position but due to subdued market activities from 2016, the Commission’s reserve position has been declining as depicted below. However, the position has since changed post 2020 were there has been an upward trend.

25 Income Earned During the year ended 31st December 2020, the Commission internally generated 61% of its income while GRZ grant support accounted for 39%. This is on the backdrop of subdued market activities as explained above. Commission Expenses The Commission being in the services sector, human capital is its main asset. Therefore, the Commission’s major expense continues to be employee costs, a significant and key component of our regulatory activities and therefore the key cost driver. On a comparative basis, for the period to 31st December 2020, the Commission’s total staff costs were 71% (2019 – 67%) of its total expenditure. Being a service-oriented organization that also champions investor awareness and investor protection, labor, awareness, and governance costs continues to be the Commission’s major cost elements. The Commission also strives to uphold good corporate governance by ensuring that the SEC had a well-functioning Board supported by effective Board committees. In order to assist the Board, make informed licensing, authorization, and registration decisions among others, the Board, as provided for in the Securities Act, has constituted a number of committees of the Board, which have a good representation of various required professions. Capital Expenditure The Commission’s capital expenditure was as follows during the period under review: Type 2020 ZMW 2019 ZMW Computer hardware 69,575 45,561 Office equipment - - Office furniture - - Motor vehicles Land and Buildings

28,378 Total 69,575 73,939 Staff Complement and staff matters The Commission’s staff complement during the review period remained at 24 compared to an approved structure of 43 (2018– 2021). This staff head count is below the minimum required to effectively run with the legal mandate of protecting investors required of the Commission. -5000000 0 5000000 10000000 15000000 2014 2015 2016 2017 2018 2019 2020 Movement in reserves

26 To continue in operational existence following the financial resource challenges that started in 2018 and more pronounced in 2019, staff, at the request of the Board, agreed for the Commission to suspend certain parts of the Conditions of Service as a way of keeping the operating costs within the Commission’s cash flows. With this and other operational rationalisations, the Commission, was one of the few entities that did not experience staff going without pay in 2020. The full list of employees during the period under review is provided in Appendix I while the approved structure is highlighted below:

27 SEC ORGANIZATIONAL STRUCTURE Board Committees Risk &Audit Committee • Compensation Fund Committee • Licensing Committee • Market Transactions Committee • Staff & Remuneration Committee • Risk &Audit Committee SEC Board Chief Executive Officer Director￾Mkt Supervision & Devpt Director￾Finance & Administration Director-Enforcement & Legal Services / Commission Secretary Manager￾Law Reform & Enfor Manager￾Financial Inclusion Manager￾Market Devpt Mkt Supervision (Markets) Manager￾Mkt Supervision (CISs) Manager￾Investigations & Enforcement Manager￾Mtk Transactions Manager￾Admin Internal Auditor Exec. Assistant Surveillance Officer Licensing Officers (*2) Financial Analyst Econ. Research Officer Mkt Research & Product Devpt. Officer Investor Educ. Officer HR Officer Record Mgt Officer Resource Centre Officer Personal Assistant IT Officer Secretary Secretary Office Assistant Manager￾Finance Secretary S1 S3 S2 S4 S4 S5 S6 S9 S8 S7 Investigation Officers (*2) Accounts Officers (*2) Legal Officers (*2) Inspectors (*4) Drivers (*3) SEC GRADE

28 Training and Workshops Multi-national and Regional Conferences and Summits Attended by Commission Staff The Commission did not send any of its staff for training outside of Zambia due to financial constraints. However, several staff members did attend online courses, workshops and seminars as part of the Commission’s deliberate policy to ensure staff are aware of the developments in this ever-changing capital markets environment. Phillip K. Chitalu CHIEF EXECUTIVE OFFICER

29 Corporate Governance 2020 was a year that enabled the Commission, like many other public and private institutions, to leverage on technology in order to achieve its oversight role. With COVID-19 protocols preventing meetings of certain numbers, the Commission has been using electronic meeting platforms to conduct its committee and board meetings. The Commission is no longer talking about the new normal but is living it. Corporate governance is a key function employed by the Commission to ensure that the Commission is properly managed and controlled. The Commission Board ensures that the distinct roles of management and the Board are not confused. The Securities Act does highlight the functions that the Board is mandated to exercise and the power to delegate its functions to the Chief Executive Officer or a Committee of the Board. The exercise of these functions not only ensure the attainment of the three key objectives of securities regulation being investor protection, ensuring markets are fair, efficient and transparent as well as the reduction of system risk but they also ensure that the governance principles of transparency, responsibility, accountability and fairness are complied with. The Board’s oversight role is highlighted in Section 8 of the Securities Act, No. 41 of 2016. In addition, the Commission has a Board Charter that prescribes the conduct and operations of the Board and its Members, individually and severally. The Charter guides Members on declarations of interest, gift acceptance restrictions as well as the prohibition of trading on non￾public, price-sensitive information. The Commission also enforces a Code of Conduct to the Commission staff which prescribes the conduct and behaviour of staff on governance issues, especially regarding conflict of interest. The Code of Conduct requires staff to declare interest in matters in which staff could have personal interest. It is also a requirement that staff declare gifts received from any person or entity, whether regulated by the Commission or not as well as insider dealing restrictions. In order to ensure that the Commission is kept abreast with international corporate governance trends, the Commission requires all senior management staff to be members of the Institute of Directors of Zambia.

30 Board Composition In 2020, there was a change in the composition of the Commission’s Board with the Member representing the Ministry of Finance being replaced with another Member. The Board’s composition is eight (08) Members representing the following institutions in accordance with Section 8(2) and (3) of the Securities Act, No. 41 of 2016: a) Bank of Zambia; b) Law Association of Zambia; c) Zambia Institute of Chartered Accountants; d) Zambia Chamber of Commerce and Industry; e) Ministry responsible for finance; f) Ministry responsible for justice; g) Pensions and Insurance Authority; and h) the Commission’s Chief Executive Officer as ex-officio Member. All the non-executive Members of the Commission Board are appointed by the Minister from a nomination made by the respective organisation. In addition, section 8(5) of the Act requires the Minister to ensure that at least fifty percent of each gender is nominated and appointed to the Commission Board, unless it is not practicable to do so. However, the Act empowers the Members to elect, from amongst their number, a Chairperson and Vice-Chairperson of the Board. During the period under review, the Commission Board consisted of the following Members: Name of Board Member Institution Represented Position Appointment date Mr. Amos Siwila Law Association of Zambia Chairperson 28.08.2018 Mr. George Nonde Zambia Chamber of Commerce and Industry Vice-Chairperson 01.09.2017 Mrs. Ireen M. Habasimbi* Ministry responsible for finance Member 02.05.2017 Mr. Mulele M. Mulele** Ministry responsible for finance Member 29.05.2020 Mrs. Natasha N. Kalimukwa Ministry responsible for justice Member 13.03.2018 Dr. Jonathan Chipili Bank of Zambia Member 28.08.2018 Ms. Mainza Masole Pensions and Insurance Authority Member 12.06.2020 Mrs. Ruth S. Mugala Zambia Institute of Chartered Accountants Member 02.10.2018 Phillip K. Chitalu SEC Chief Executive Officer ex-officio Member

• Mrs. Ireen M. Habasimbi’s tenure of office came to an end on 1st May 2020. ** Mr. Mulele M. Mulele was appointed to the Commission Board on 29th May 2020 as the representative of the Ministry of Finance.

31 Composition of Commission Board in 2020: Front row (from Left to Right): Mrs. Natasha. N. Kalimukwa, Mr. Amos Siwila and Mrs. Ireen M. Habasimbi Back row (from Left to Right): Dr. Jonathan Chipili, Mrs. Ruth S. Mugala, Mr. George Nonde, Ms. Mainza Masole and Mr. Phillip K. Chitalu Board Meetings The Board held four scheduled meetings in February, July, September and December 2020. In addition, the Board held one Special Meeting in May in order to deal with an urgent regulatory matter. The following is the Board attendance at the scheduled and special meetings:

32 NAME February Scheduled Meeting May Special Meeting July Scheduled Meeting September Scheduled Meeting December Scheduled Meeting Mr. Amos Siwila ✓ ✓ ✓ ✓ ✓ Mr. George Nonde ✓ ✓ ✓ ✓ ✓ Mrs. Ireen M. Habasimbi ✓ ✓ - - - Mr. Mulele M. Mulele - - ✓ ✓ ✓ Mrs. Natasha N. Kalimukwa ✓ ✓ ✓ ✓  Dr. Jonathan Chipili ✓ ✓ ✓ ✓ ✓ Ms. Mainza Masole ✓ ✓ ✓ ✓ ✓ Mrs. Ruth S. Mugala ✓ ✓  ✓ ✓ Mr. Phillip K. Chitalu ✓ ✓ ✓ ✓ ✓ ✓ Meeting attended  Meeting not attended

• Representative no longer on the Commission Board Committees and Committee Membership In order to enhance efficient decision-making, the Securities Act of 2016 has introduced timeframes within which decisions should be made. The Board has therefore pursuant to section 14 of the Act delegated, to the Licensing Committee and Market Transactions Committee, decision-making on time-sensitive matters such as those relating to licensing as well as market transactions (including registration of securities for capital raising and other authorisations). The delegated function ensures that decisions are expeditiously made without having to wait for the quarterly scheduled Board meetings. In this regard, the Commission Board has established Committees to assist the Board in performing some of the statutory functions conferred on the Board. The Commission has one ad hoc and five standing Board Committees namely – a) the Compensation Fund Committee; b) the Licensing Committee; c) the Market Transactions Committee; d) the Risk and Audit Committee; e) the Staff and Remuneration Committee; and f) the Property Acquisition and Development Committee (ad hoc). The Compensation Fund Committee is a Board Committee established pursuant to section 176 of the Securities Act. The Committee is responsible for overseeing matters relating to the Compensation Fund and reporting to the Board. In particular, the Committee administers the Fund and make determinations for the settlement of claims against the Fund as provided for under the Securities (Compensation Fund) Regulations. The Licensing Committee is a Board Committee established pursuant to section 13 of the Securities Act and is responsible for licensing market players and overseeing and reporting on

33 the existing and new policies as stipulated in the Act and the Rules made pursuant to the Act as well as enforcement matters. The Market Transactions Committee is a Board Committee established pursuant to section 13 of the Securities Act and is responsible for overseeing, and reporting to the Board on approval of applications for registration of securities required to be registered under Part VIII of the Act as well as the quanta and efficacy of capital formation. The Risk and Audit Committee is a Board Committee of the Board constituted under section 13 of the Securities Act. In addition, it is a statutory requirement under the Public Finance Management Act, No. 1 of 2018, for this Committee to be established. The Committee is responsible for overseeing financial management, reviewing internal controls, checks and balances and risk management. The Staff and Remuneration Committee is a Board Committee established pursuant to section 13 of the Securities Act and is responsible for overseeing, and reporting to the Board on recruitment, skills training, capacity building and retention of staff. The Property Acquisition and Development Committee has been established as an ad hoc Committee to guide Management in the Commission’s property acquisition and development process. This Committee did not hold any meetings in the period under review. In addition, the Commission has established a Procurement Committee, chaired by the Chief Executive Officer, in accordance with the Public Procurement Act, No. 12 of 2008. In 2020, the Committees were composed of the following members: COMMITTEE MEMBERSHIP REPRESENTATION MEMBER LICENSING COMMITTEE Board Member representing MoF and Committee Chairperson Mrs Ireen M. Habasimbi/ Mr. Mulele M. Mulele Board Member representing ZICA Mrs. Ruth S. Mugala BoZ Representative Mrs. Hellen L. Banda ERB Representative Mr. Fred Hang’andu PIA Representative Mrs. Namakau Mundia-Ntini Ex-officio Board Member Mr. Phillip K. Chitalu MARKET TRANSACTIONS COMMITTEE Board Member representing BoZ and Committee Chairperson Dr. Jonathan Chipili Board Member representing ZACCI Mr. George Nonde Board Member representing MoF Mrs. Ireen M. Habasimbi/ Mr. Mulele M. Mulele CCPC Representative Mr. Chilufya P. Sampa PACRA Representative Mr. Anthony Bwembya ZDA Representative Mr. Matongo Matamwandi/ Mr. Mukula Makasa Ex-officio Board Member Mr. Phillip K. Chitalu

34 COMMITTEE MEMBERSHIP REPRESENTATION MEMBER STAFF AND REMUNERATION COMMITTEE Board Member representing ZACCI and Committee Chairperson Mr. George Nonde Board Member representing BoZ Dr. Jonathan Chipili MoJ Representative Mr. Joe Simachela ZIHRM Representative Mrs. Beatrice N. Mwila RISK AND AUDIT COMMITTEE Board Member representing ZICA and Committee Chairperson Mrs. Ruth S. Mugala Board Member representing PIA Ms. Mainza Masole ZICA Risk Expert Mr. Kapembwa Sindano MoF Representative Mrs. Joyce P. Sundano/ Ms. Namaambo Kaliyangile LAZ Representative Ms. Matilda C. Kaoma COMPENSATION FUND COMMITTEE Board Member representing MOJ and Committee Chairperson Mrs. Natasha N. Kalimukwa BAZ Representative and Committee Vice￾Chairperson Mr. Fanwell Phiri CMAZ Representative Mr. Nicholas Kabaso ZACCI Representative Dr. Francis M. Ndilila LAZ Representative Ms. Abigail Chimuka MoF Representative Mrs. Mwila K. Zulu PROCUREMENT COMMITTEE SEC CEO and Committee Chairperson Mr. Phillip Chitalu Procurement specialist Mrs. Mary Banda Procurement specialist Mr. Christopher S. Mwandu SEC Member Mrs. Diana Sichone SEC Member Ms. Mutumboi Mundia SEC Member Mr. Mateyo Lungu PROPERTY ACQUISITION AND DEVELOPMENT COMMITTEE* Board Member representing PIA and Committee Chairperson Ms. Mainza Masole Board Member representing ZICA Mrs. Ruth S. Mugala MoJ Representative Mr. Joe Simachela Ministry of Works and Supply Representative Mr. Geoffrey C. Phiri Show Society of Zambia Representative Mr. Vasco Sikanyeu

• Committee did not meet during the review period Audit Function The Commission Board has an interest to ensure that it is transparent, responsible, accountable and fair in all its dealings with all types of stakeholders. The Board has delegated, to the Risk and Audit Committee, its role of ensuring that the Commission has put in place sound financial management structures and processes, including financial, risk management and internal audit

35 controls. The Commission, therefore, uses audit as one of the most important oversight tools of its corporate governance. The Commission has both an internal and external audit function. Due to the size of the Commission, the internal audit function is not performed by a member of staff engaged as an internal auditor but has traditionally been outsourced. However, following the substantial increase in audit fees prescribed under the Accountants (Client Fees) Regulations, Statutory Instrument No. 34 of 2018, the engagement was suspended and the Risk and Audit Committee of the Board has taken up an interim oversight role to enhance the Commission’s adherence to internal controls, procedures and processes. The internal audit function is meant to ensure that internal controls are effectively functioning in managing risk in the Commission. The Commission’s Audit Committee achieves this by reviewing the control systems for the Commission and providing an independent assurance of risk management of the Commission to the Board. In addition, the institutional capacity assessment undertaken by the FSDA￾appointed Consultants reviewed, among other things, the internal controls at the Commission. In the review period, the Commission was engaging the office of the Controller of Internal Audit at the Ministry of Finance to consider attaching one of the auditors to the Commission and the discussions had been inconclusive at the end of the review period. The Securities Act requires the Commission’s external auditors to be appointed by the Commission subject to approval by the Minister responsible for finance. The external auditors are required to perform an annual audit and present a report to the Board on the Commission’s financial statements as well as stating the level of compliance by the Commission to the law, regulations and policies. The financial statements are thereafter presented to the Minister of Finance as part of the Commission’s Annual Report. Commission Secretary The Commission’s Board Secretary is appointed pursuant to Section 17 of the Securities Act and is in charge of the corporate secretarial affairs of the Commission, under the general supervision of the Chief Executive Officer. The law further allows the Secretary to perform other functions directed by the Board under the general supervision of the Chief Executive Officer. The Director – Enforcement and Legal Services is the Board-appointed Secretary to the Commission Board and performs the secretarial functions as required under section 17 of the Securities Act. Board Performance Self-Evaluation Section 11 of the Commission’s Board Charter mandates the Board and its Committees to undertake a performance self-evaluation in order to assess the effectiveness of the Board, its Committees, and its individual Board Members. The Board has over the last five years been undertaking an annual performance self-evaluation, in the last quarter of the financial cycle, as a corporate governance performance monitoring tool.

36 The performance self-evaluation is a collective, introspective, and comprehensive reflection by the Board to assess how the Board can be made more effective. The evaluation process is meant to identify strengths and weaknesses, to flag areas for improvement, and to plan for further action as appropriate. For the process to be effective, Board members are required to be open and submit positive ideas and opinions. The Board has developed an appropriate methodology to conduct the Performance Evaluations through a questionnaire that has been developed and which is required to be filled in by each Board Member. The responses are then collated and the results of the evaluation presented to the Board for further consideration. Overall Assessment of Board Performance in 2020 The Board performance self-evaluation was done for the following eight major areas: Board Activity; Mission and Purpose; Governance/Partnership Alignment; Board Organisation; Administration and Staff Support; Time and Location of Meetings; Recording/Minute Taking; and Membership. The analysis of each of these areas was done and the results for each area assessed. The assessment revealed an overall Board’s performance for 2020 rated at 87.34% compared to the assessment for 2019 at 88.55% with the lowest rating being the assessment of Governance/Partnership Alignment at 74.36% and the highest rating being the assessment of Recording/Minute Taking at 97.5%. The lowest and highest rated areas were consistent from those rated highest and lowest in 2019, respectively. The following table highlights the Board’s performance for 2020 for each of the assessment areas: Comparative Performance over a five-year period In the next Table, a comparative analysis of the Board’s performance over the last five years for which the Board Performance Self-Evaluation has been conducted is made: 90 80 74.36 92.5 91.88 80.94 97.5 91.5 87.335 70 75 80 85 90 95 100 Board Activity - 90% Mission and Purpose - 80% Governance/Partnership Alignment - 74.36% Board Organisation - 92.5% Administration and Staff Support - 91.88% Time and Location of Meetings - 80.94% Recording/Minute Taking - 97.5% Board Membership - 91.5% Overall Board Performance for 2020 - 87.34% 2020 Overall Board Performance

37 Five of the eight areas assessed indicated a reduction in performance rates on a comparative basis with the assessment done for 2019 with the overall Board performance recording a marginal decrease in performance from 88.55% in 2019 to 87.34% in 2020. Board Committee Performance The Commission Board has five standing and one ad hoc Committee. The performance of the five standing Committees was assessed using the same methodology adopted for the Board and which was aimed at identifying strengths and weaknesses, flagging areas for improvement and planning for further action as appropriate. The Committee Performance of the Property Acquisition and Development Committee was not assessed in 2020 yet again as the Committee’s Meetings have been suspended until the resumption of the Burma Road construction project or until another construction or renovation is commissioned. The Committee performance self￾evaluation was conducted for the following seven major areas: Purpose of the Committee; Support for the Committee; Administration and Staff Support; Time and Location of Meetings; Attendance; Recording/Minute Taking; and Membership. Compensation Fund Committee Self-assessment The self-assessment of the Compensation Fund Committee revealed the following results: The Compensation Fund Committee’s overall performance for 2020 was found to be at 87.67% compared to the assessment rate for 2019 of 84.18%. Comparatively, the 2018 assessment rate was 77.44%, while the 2017 assessment rate was 85.36%. In this assessment, the highest rating is Recording/Minute Taking at 90% while the lowest rating is Committee Member Attendance at 73.33%. 40 50 60 70 80 90 100 Overall Board Performance Board Membership Recording/Minute Taking Time and Location of Meetings Administration and Staff Support Board Organisation Governmance/Partnership Alignment Mission and Purpose Board Activity Comparative of Board Overall Performance for 2016 to 2020 2016 2017 2018 2019 2020

38 Licensing Committee Self-assessment The self-assessment of the Licensing Committee revealed the following results: The Licensing Committee’s overall performance for 2020 was found to be at 81.92% compared to that for 2019 at 87.71%. This is comparable to the 2018 assessment rate of 86.16% which is also slightly higher than the 2017 assessment rate of 82.38% with the highest rating being Recording/Minute Taking at 91.67% while the lowest rating was Attendance at 70%. 60 65 70 75 80 85 90 95 100 Overall Committee performance - 87.67% Committee Membership - 91.21% Recording/Minute Taking - 83.33% Attendance - 90% Time and Location of Meetings - 89.17% Administration and Staff Support - 78.33% Support for the Committee - 86.67% Purpose of Committee - 95% Overall Committee performance - 87.67% Committee Membership - 91.21% Recording/Mi nute Taking - 83.33% Attendance - 90% Time and Location of Meetings - 89.17% Administratio n and Staff Support - 78.33% Support for the Committee - 86.67% Purpose of Committee - 95% 2017 85.36 90 91.67 61.67 87.92 94.17 91.67 80.42 2018 77.44 85 83.33 70 78.75 70.83 77.5 76.67 2019 84.17857143 86.67 90 73.33 85 86.67 80 87.58 2020 87.67285714 91.21 83.33 90 89.17 78.33 86.67 95 Compensation Fund Committee Self-Assessment - 2017 to 2020 2017 2018 2019 2020

39 Market Transactions Committee Self-assessment The self-assessment of the Market Transactions Committee revealed the following results: The Market Transactions Committee’s overall performance for 2020 was found to be at 82.96% which is a marked reduction from the overall performance rate for 2019 of 91.63%. The 2019 rate was an increase from the 2018 assessment rate of 90.46% as compared to the 2017 assessment rate of 85.36%. The area with the highest rating was Committee Recording and Minute Taking at 90% while the lowest rating was Committee Member Attendance at 70%. The areas rated highest and lowest have consistently remained the same from 2019. 60 65 70 75 80 85 90 95 Overall Committee performance - 81.92% Committee Membership - 86.67% Recording/Minute Taking - 91.67% Attendance - 70% Time and Location of Meetings - 80% Administration and Staff Support - 87.5% Support for the Committee - 78.33% Purpose of Committee - 79.26% Overall Committee performance - 81.92% Committee Membership - 86.67% Recording/Mi nute Taking - 91.67% Attendance - 70% Time and Location of Meetings - 80% Administratio n and Staff Support - 87.5% Support for the Committee - 78.33% Purpose of Committee - 79.26% 2017 82.38285714 86.67 90 66.67 81.48 86.67 86.67 78.52 2018 86.16142857 88.33 93.33 80 82.59 90.67 80.83 87.38 2019 87.71142857 88.33 91.67 91.67 90.74 90.83 80 80.74 2020 81.91857143 86.67 91.67 70 80 87.5 78.33 79.26 Licensing Committee Self-Assessment for 2017 to 2020 2017 2018 2019 2020

40 Risk and Audit Committee Self-assessment The self-assessment of the Risk and Audit Committee revealed the following results: The Risk and Audit Committee’s overall performance for 2020 was found to be at 78.9% a reduction as compared to that for 2019 which was 84.58%. The 2019 overall assessment was also a reduction from the overall rate of 87.65% assessed in 2018 and compared to the overall rate of 87.88% as assessed in 2017. The highest rating was made for Recording/Minute Taking at 92% while the lowest rating was Attendance at 76%. 60 65 70 75 80 85 90 95 100 Overall Committee performance - 82.96% Committee Membership - 85% Recording/Minute Taking - 90% Attendance - 70% Time and Location of Meetings - 86.43% Administration and Staff Support - 86.43% Support for the Committee - 80% Purpose of Committee - 82.86% Overall Committee performance - 82.96% Committee Membership - 85% Recording/Min ute Taking - 90% Attendance - 70% Time and Location of Meetings - 86.43% Administration and Staff Support - 86.43% Support for the Committee - 80% Purpose of Committee - 82.86% 2017 85.36 90 91.67 61.67 87.92 94.17 91.67 80.42 2018 90.45857143 93.57 92.86 78.57 94.64 95.71 90 87.86 2019 91.63285714 93.57 98.57 78.57 91.79 95.71 91.43 91.79 2020 82.96 85 90 70 86.43 86.43 80 82.86 Market Transactions Committee Self-Assessment for 2017 to 2020 2017 2018 2019 2020

41 Staff and Remuneration Committee Self-assessment The self-assessment of the Staff and Remuneration Committee revealed the following results: The Staff and Remuneration Committee’s overall performance for 2020 was found to be at 94.36% which is marginally lower than the assessment rate of 94.68% for 2019. In comparison, the assessment for 2018 was 89.64% while that for 2017 was 90.65%. The highest rated category was the assessment for Recording or Minute Taking at 100% while the lowest rating was Support for the Committee at 85%. 60 65 70 75 80 85 90 95 100 Overall Committee performance - 78.9% Committee Membership - 88% Recording/Minute Taking - 92% Attendance - 66% Time and Location of Meetings - 81.78% Administration and Staff Support - 80% Support for the Committee - 72% Purpose of Committee - 72.53% Overall Committee performance - 78.9% Committee Membership - 88% Recording/Mi nute Taking - 92% Attendance - 66% Time and Location of Meetings - 81.78% Administration and Staff Support - 80% Support for the Committee - 72% Purpose of Committee - 72.53% 2017 87.88142857 87.5 95 65 96.67 96 100 75 2018 87.65142857 93 94 82 90.22 87.2 88 79.14 2019 84.58714286 89 90 82 87.11 84 84 76 2020 78.90142857 88 92 66 81.78 80 72 72.53 Risk and Audit Committee Self-Assessment for 2017 to 2020 2017 2018 2019 2020

42 Committee Overall performance The following table shows the overall performance of each of the Committees in one table: Diana S. Sichone (Mrs.) COMMISSION SECRETARY 75 80 85 90 95 100 Overall Committee performance - 94.36% Committee Membership - 98.75% Recording/Minute Taking - 100% Attendance - 97.5% Time and Location of Meetings - 97.22% Administration and Staff Support - 91.25% Support for the Committee - 85% Purpose of Committee - 90.83% Overall Committee performance - 94.36% Committee Membership - 98.75% Recording/Mi nute Taking - 100% Attendance - 97.5% Time and Location of Meetings - 97.22% Administratio n and Staff Support - 91.25% Support for the Committee - 85% Purpose of Committee - 90.83% 2017 90.65428571 92.5 92.5 90 93.33 92.5 90 83.75 2018 89.64285714 95 90 90 95 93.75 80 83.75 2019 94.68285714 98.75 97.5 90 96.11 95 92.5 92.92 2020 94.36428571 98.75 100 97.5 97.22 91.25 85 90.83 Staff and Remuneration Committee Self-Assessment from 2017 to 2020 2017 2018 2019 2020 75 80 85 90 95 100 Staff and Remuneration Committee - 87.67% Risk and Audit Committee - 78.9% Property Acquisition and Development Committee - 0% Market Transactions Committee - 82.96% Licensing Committee - 81.92% Compensation Fund Committee - 87.67% Board Committee Performance for 2017 to 2020 2017 2018 2019 2020

43 Report on regulatory and operational efficiency The Commission is required to report on its regulatory and operational efficiency as part of the reporting requirements introduced by the Securities Act of 2016. In particular, Section 11(3) of the First Schedule to the Securities Act, No. 41 of 2016 requires the Commission to include this information in its Annual Report. Thus, in reporting this information, the Commission is required to highlight the following: a) the extent to which the Commission has fully implemented its regulatory oversight functions as provided under the Securities Act and in its rules and the effectiveness of the operation of such regulatory oversight function; b) the actual and projected cost savings to the Government, if any, resulting from the operations of the Commission; c) the actual and projected costs which the Commission and the public would have incurred if the Commission had not undertaken regulatory responsibility for certain areas under the Commission’s jurisdiction; d) the nature of the working relationship between the securities exchanges, clearing and settlement facilities and the Commission; e) an assessment of the actual and projected efficiencies the Commission has achieved or expects to be achieved as a result of the continuing regulatory activities of the Commission; and f) the immediate and projected capabilities of the Commission. The Commission reports on each of the six areas as follows: Extent of implementation of the Commission’s oversight function and their effectiveness The Board oversees the administrative affairs of the Commission by putting in place effective, efficient and transparent systems of corporate governance and generally providing strategic direction to the Commission, among other responsibilities. Section 8 of the Securities Act places the Securities Act’s mandate in the Commission Board which is comprised of Members representing different institutions as required under the Securities Act. In addition, the Board has also constituted Committees to which it has delegated some of its decision-making functions so as to assist the Board in exercising its statutory functions. The Commission’s Board Charter also provides guidance to the Board Members in their conduct of Board business to ensure that there is a right balance between the oversight role of the Board and the secretarial function of the Commission. Further, the Commission applies a Code of Conduct to the Commission staff which prescribes the conduct and behaviour of the staff especially with regard to conflict of interest issues. Both the Code of Ethics and the Board Charter have enshrined provisions and procedures on the declaration of interest and declaration of gifts from any person or entity, whether regulated by

44 the Commission or not. Further, both documents specify the procedures to be taken whenever an employee or a Board Member would like to participate in the capital markets as a player, which guard against trading on non-public, price-sensitive information. The Commission reports that during the year under review, none of the Board members and staff were sanctioned with respect to this governance structure that is in place. In addition, the Commission has been able to implement its oversight functions by undertaking regulatory actions in response to infringements, by capital market operators, of the legal and regulatory framework. Some of these regulatory actions include the taking of supervisory possessions and the imposition of administrative sanctions including fines, censures and recompense directives, among others. Cost Savings resulting from the Commission’s Operations One of the Commission’s functions highlighted under section 8(b) of the Securities Act include the approval of the Commission’s budget estimates to ensure sound financial management structures and processes, including financial, risk management and internal audit controls. The Commission prudently manages its resources to achieve its strategic objectives and therefore does not spend outside the approved budgets including in the review period. Cost to the Nation for not having the Commission As at December 2020, the Commission was protecting over ZMW59 billion worth of investments in products ranging from shares or stocks, corporate bonds as well as assets under management in collective investment schemes. These investments are made directly by not less than 165,000 investors and indirectly much more considering that the pension schemes and other institutional investors invest in the capital markets on behalf of the Zambian public. As the majority of the institutional investors are pension funds which invest employee contributions into several investment portfolios including the capital markets, the investments of these funds would be susceptible to fraud and other criminal activities without the Commission being present. Thus, in order to effectively undertake its investor protection mandate over the savings or investments earlier highlighted, the Commission requires issuers to make prompt and full disclosure of non-public price-sensitive information by a company’s directors to the general public which disclosures enable investors and the general public to make informed decisions. With the large pool of savings subject to which the Commission exercises its regulatory investor protection mandate, the Commission’s importance or relevance cannot be overemphasised as the savings could be lost, eroded or misapplied without the Commission’s oversight function. This would have an adverse impact on financial market confidence as well as the capacity of the capital markets to play the important function of savings mobilization.

45 The Commission is there to ensure that it protects the interests of investors in the capital markets and in the process ensure maintenance of financial sector confidence which is key to resource mobilisation through bond issuances and other instruments. Actual and Projected efficiencies the Commission has achieved as a result of the continuing regulatory activities The Commission has enhanced enforcement activities which has resulted in an increase in compliance by capital market operators which has a corresponding increase in market confidence. This has translated into increased capital mobilisation especially in Collective Investment Schemes (CISs) and Corporate Bonds. For the 2020 period, the Commission Board approved the following Key Performance Indicators (KPIs) to enable the Commission achieve its strategic objectives in an efficient and effective manner:

1. Increase capital market investor base from 85,000 to 90,000 by December 2020
2. Issue the following 5 Regulations and Rules by December 2020: (a) the Securities (Registration of Securities) Regulations; (b) the Securities (Capital Market Operators) (General Licensing Procedures and Requirements) Rules and Regulations; (c) the Securities (Collective Investment Scheme) Rules and Regulations, 2019; and (d) the Securities (Fees and Levies) Rules; and (e) the Securities (Financial Technology) Rules;
3. Issue CP (Commercial Paper), REIT (Real Estate Investment Trust), Venture Capital and ETF (Exchange Traded Funds) Guidelines by Dec 2020
4. Address 70% of complaints received during 2020
5. Enhance revenue mobilisation by achieving targets set in the 2020 budget (i.e. K13million) Although the implementation of these performance indicators was adversely affected by limited financial resources as well as the COVID-19 pandemic that prevented physical consultative meetings from being convened to consult the market on the draft laws, the Commission was able to see the number of investors increase to over 86,000 during the course of the year and submitted the Securities (Fees and Levies) Rules to the Ministry of Justice for enactment. A number of draft Statutory Instruments were also finalised but had not been subjected to the stakeholder consultative process which was adversely affected by limited financial resources as well as the unfolding COVID-19 pandemic as earlier highlighted. The draft laws are therefore scheduled to undergo both a stakeholder consultative review process as well as the undertaking of regulatory impact assessments as required under the Business Regulatory Act, No. 3 of 2014. The Commission, however, did issue Guidelines on bond trade reporting which has significantly increased transparency and disclosure of bond prices in the market. Despite the challenges encountered in the year, the Commission was able to implement what it could of the performance indicators as would enhance the Commission’s regulatory efficiencies.

46 In attempting to address the reduced financial resources available for the Commission to undertake its regulatory activities, the Commission leveraged on partnerships with a number of institutions that were supporting the following Commission projects highlighted in the Table: No. Project Partner Project

1. World Bank Law Review and Legal Drafting of Statutory Instruments
2. Toronto Centre Risk-Based Supervision
3. FSDA//FSDZ Institutional Capacity Assessment and Capital Markets Development Master Plan
4. BioFin/UNDP Green bonds regulatory framework
5. CISI Regulatory Assessment Module
6. Junior Achievement Zambia / Prudence Foundation Cha Ching Children’s Financial Literacy Education
7. UNCDF Capital Markets Schools Challenge Game Digitizing Nature of the working relations with Capital Market Operators The Commission has a very good working relationship with the capital market operators represented by the Capital Markets Association of Zambia (CMAZ) to which each capital market operator is, by law, required to be a member of. The Commission holds regular stakeholder meetings including the annual capital markets operators’ forum, the quarterly Chairman’s breakfast meeting with the market, and other regular market meetings. Further, the Chief Executive Officer also conducts media briefs on a regular basis to inform the market on the latest developments in the capital markets. Immediate and Projected capabilities of the Commission The Commission has, as one of its strategic objectives, the enhancement of regulatory capacity for the Commission staff. In 2020, the Commission leveraged on partnerships with cooperating partners such as Toronto Centre, CISI and IOSCO to undertake training of Commission staff in topical areas including risk-based supervision. The Commission also took advantage of electronic platforms made necessary by the unfolding COVID-19 pandemic to enhance the regulatory capacity of Commission staff. The trainings and capacity building that Commission staff underwent in 2020 have ensured that the Commission is always in tune with current developments in the capital markets space. For instance, the full implementation of the RBS framework that was in the second year of implementation in 2020 would ensure that the Commission uses the limited resources it has to address the riskiest areas of the market.

47 Operational Activities In 2020, like most public institutions, the Securities and Exchange Commission (SEC) was affected by the COVID-19 pandemic. However, despite the adverse effects of the pandemic on the Commission, the Commission was able to execute its dual mandate of market supervision and market development under the ‘new normal’ leveraging on technology and electronic meeting platforms to ensure that the performance of the Commission’s investor protection and market development mandate could continue as seamlessly as possible despite the adverse effects of the pandemic. In undertaking its investor protection mandate, the Commission ensures that the markets are free, fair and transparent by requiring the registration of securities, the licensing and authorisation of capital market operators and the supervision of capital market operators to ensure that they are in compliance with the requirements of the law. MARKET SUPERVISION The Commission is responsible for the supervision of capital markets operators. The Commission undertakes its supervisory function through undertaking a number of activities, including licensing, inspections, surveillance and complaints handling. A key objective is to ensure capital markets operators comply with the Securities Act and its subsidiary legislation, thus ensuring a secure, fair and orderly investment environment that enhances investor and public protection and promotes an orderly development of the industry. The capital markets operators in the Zambian Capital Markets industry consist of brokers/dealers, investment advisers, securities exchanges, central securities depositories, issuers, fund managers, credit rating agencies, investment banks, transfer agents among others. [The full list of capital markets players and their contact details is provided in Appendices II and III.] The regulatory power of the Commission is anchored upon four pillars as follows: a) Any person dealing or advising on securities must be licensed by the Commission; b) Any securities market must be authorized and licensed as a securities exchange by the Commission; c) All securities of a public company which are publicly traded must be registered by the Commission; and d) CISs must be authorized by the Commission. Market Supervision (“MS”) entails ensuring that persons authorized/licensed to operate in the Zambian Capital Markets, including listed and quoted businesses; collective investment schemes (CISs); exchanges; brokers; investment advisers; representatives; custodians; trustees; etc. adhere at all times to continuing obligations as set out in the Securities Act. MS encompasses the three amin functions of licensing, inspections and surveillance and complaints handling as highlighted in the following table:

48 Capital markets players are required to submit to the Commission monthly, quarterly and yearly returns. For example, • All capital markets operators are required to submit audited financial statements; • Dealers and Investment advisers are required to submit a separate auditors report addressed to the Commission and management confirmation of compliance; • All dealers are required to submit Monthly Capital Adequacy Reports; • Fund managers are required to submit monthly and quarterly returns; and • Issuers are required since 2019 to submit a Gap Analysis Report and other reports under the Internal Controls Over Financial Reporting Framework. These reports are used by the Commission for offsite monitoring as well as for planning on-site inspections of capital markets operators. Licensing Licensing, being at the forefront, sets high regulatory standards at the very outset to fulfil the Commission’s mandate which is designed to ensure investor protection and support the operation of a free, orderly, fair, secure and properly functioning Securities Market. Licensing acts as the entry point into the Securities Market by capital markets operators. Therefore, the SEC strives to strike the right balance between its business-friendly approach and complying with international regulatory standards. In line with its endeavour to align its processes to international best practices and to embrace modern regulatory approaches, the SEC constantly ensures that these practices are embedded Licensing The MS Team reviews and processes license applicactions in line with the Securities Act provisions Inspections The MS Team reviews and assesses the licensed persons’ work procedures & their compliance to the Act, Rules and Directives Surveillance & Complaints handling The MS Team undertakes surveillance using variois tools, plus attending Annual General Meeting. The Team also deals with complaints lodged with the Commission

49 into its operations at the licensing stage. As a result, this provides for a more cohesive and transparent framework guiding further improvements in the Commission’s regulatory approach. The licensing procedure is clearly defined in the Securities Act and rules, regulations, directives and guidance notes issued by the SEC. At Licensing, the SEC has in place a transparent and well￾established set of procedures leading to the issue of a licence or the rejection thereof. In assessing applications, the SEC is required to conduct a number of assessments - including the fit and proper test of applicants. In conducting the fit and proper test, the Commission assesses the financial soundness of the applicants, lawfulness and moral standards of the proposed activity, source of funds of the proposed activity, integrity of the shareholders, directors and key managers and any other relevant issues. For corporate applicants the Commission also analyses beneficial ownership information to ensure that only people of high integrity can operate in the Capital Markets. Where applications may cause harm to the good repute of the jurisdiction, such applications are recommended for rejection. Licences in issue as at 31st December 2020 The Zambian Capital Markets continued to gain momentum and systemic importance in the year under review. The Commission continued with its role of ensuring that only fit and proper persons were allowed to conduct securities business and offer regulated services to the investing public. As at 31st December 2020, there were 168 licenses in issue. A breakdown of the number of valid licenses (by license type) is provided in the table below: License type 1 st January, 2020 Issued during the year Cancelled/ Revoked during the year Surrendered during the year 31stDecember 2020 Dealers 26 1 (1) - 26 Dealer’s Representatives 118 6 (3) (5) 116 Investment Advisors 9 - - (2) 7 Investment Advisor’s Representatives 20 1 - (4) 17 Securities Exchange 2 - - - 2 Total 175 8 (4) (12) 168 Inspections For the year 2020, the SEC carried out off-site and on-site inspections. Three (3) of the Capital Markets players were subjected to for-cause (targeted) inspections. The Commission further conducted offsite inspections for all Fund Managers.

50 In undertaking the project to implement the risk-based supervision (RBS) framework, the Commission conducted pilot inspection on two (2) market players. The pilots were conducted to test the Commission’s draft RBS Framework and tools developed by the RBS Project Team. Surveillance & Complaints Handling Market Surveillance Market surveillance continues to be one of the key functions undertaken by the Commission. It entails monitoring trade operations by using daily analysis of market trades, writing periodic reports, investigating anomalies and other activities. It also involves analysing information gathered through complaints, social, electronic and print media, among others. The goal is to ensure compliance by the capital markets operators to the SEC rules and regulations, in order to regulate the market and provide the necessary protection to investors. Issuers As part of surveillance, the Commission continued to attend, in an observer capacity, Annual General Meetings (AGMs) of entities with registered securities (issuers). During the year our market surveillance team attended AGMs for most of the issuers and the following items were noted: • Attendance: Due to the covid 19 restrictions that came into effect around March 2020 when Zambia recorded its first confirmed case, AGMs had to be postponed as physical meetings had been banned. However, in the course of the year, most companies held their AGMs virtually and this in some cases tended to affect the attendance levels as people were still trying to adjust to the new way of living in the covid-19 pandemic. • Investor Participation: Investors generally participated in the deliberations of the meetings and almost all of the issues raised by investors during the AGMs were well responded to by most companies. Some investors also seemed well involved in the monitoring of the performance of the companies in which they have invested. The Commission noted however that there were some instances when listed entities did not completely provide information requested for by investors, a matter the Commission followed up on. Collective Investment Schemes The number of authorized fund managers remained the same in 2020 (i.e. 10 fund managers managing 11 collective investment schemes). O the upside, the value of assets under management by the authorised managers increased by 46.98% from K632,467,122 at the end of December 2019 to K929,571,277 as at 31st December 2020. This growth in assets under management was largely driven by growth in customer deposits driven by marketing activities by fund managers. The growth was also driven by fair value gains in dollar denominated assets held by the respective funds as the kwacha depreciated against the United States dollar. The value of assets under management is expected to cross the K1billion mark in 2021, this is a significant milestone for the sector.

51 On the downside, the CIS industry has faced a market confidence challenge on account of two (2) fund managers facing enforcement actions by way of the Commission taking possession of the entities. The possessions in both Madison Asset Management Company and Laurence Paul Investment Services Limited, were necessitated on account of several regulatory concerns, including failure to settle redemption requests made by investors. As part of the supervisory transformation being embarked upon by the Commission, DMSD will continue to escalate matters to DELS for necessary enforcement actions. As we prepare to roll-out risk-based supervision, it is imperative that legacy issues such as poor governance, lack of adequate operating systems and issues to do with fitness and properness are thoroughly addressed. The successful implementation of RBS demands in the first place that the market operators are fit and proper. Secondly, it is important for the Commission to signal that non compliance will be met with the commensurate enforcement action. Complaints The Commission continued to receive complaints from members of the public in relation to securities business. During the review period, the Commission received 56 complaints. The complaints related to various aspects of challenges faced by some investors including delay / non-payment of redemption claims for funds not being received. eighteen (18) of these complaints have been closed while the rest are still being investigated. Year ended 31 December 2020 Year ended 31 Dec 2019 Complaints brought forward from the previous year 5 3 New complaints received during the year 56 30 Complaints closed (18) (10) Complaints referred to Legal and Enforcement Dept (35) (18) Number of active complaints at year end 8 5 Below is an analysis of the nature of complaints received in 2020: Nature of complaint No. of complaints Late/Non-payment of investment maturities/ sales proceeds 53 Minority shareholders representation on Board 1 Failure to provide contract notes 1 Missing shares 1 Total complaints 56 As noted from the graph below, there has been an upward trend in complaints received by the Commission.

52 MARKET DEVELOPMENT The year 2020 has been a remarkable year, mainly building on strategic partnerships forged in 2019. The Commission continued to work on key Projects that form a significant portion of critical deliverables as they relate to set out initiatives in our Strategic Plan 2019 – 2021. The year 2020 although peculiar with respect to the onset of the Global pandemic of COVID 19, which brought about a disruption in traditional business approaches, its very nature gave rise to a new way of thinking and doing things, and in a way, balanced off some of the challenges faced by the Commission such as, limited financial resources for project implementation and other activities such as capacity building and awareness programmes that would ordinarily require physical gatherings. Now termed as the upside of COVID 19, it became possible to host workshops, webinars, exhibitions, capacity building (Training), social media campaigns et cetera via digital or online platforms, which would have otherwise been difficult to achieve via normal channels, budgetary constraints mentioned above. Equally of significant note on the upside was that the pandemic disease has in essence ratified the Commission’s wisdom in having embarked on visionary projects such as the development of the regulatory sandbox. The regulatory sandbox initiative came on the backdrop of prior year market development interventions such as the introduction of thought leadership masterclasses that were aimed at raising awareness and/or interest in global agendas as well as new areas of capital markets development. To this end, digitisation and the global agenda of sustainability, thus greening our economies were prioritised by the Commission. The Green Bonds Framework, issued in early 2020, is yet another notable milestone that aligns Zambia well in the global green discourse, whilst signalling our readiness as a destination for green investments. Indeed, it was a challenging period, but the Commission ensured to rise above the occasion and adapt to the new ways of doing things – “new normals”. Suffice to mention, the Commission was able to weather the storm in 2020 owing in part to the strong relationships with several strategic partners who are supporting a number of projects being spearheaded by the Directorate of Market Supervision and Development.

53 An overview of the projects for 2020 are reported below: Financial Sector Deepening Africa / Zambia Partnership As part of the Commission’s long-term cooperation agreement with the Financial Sector Deepening Africa (FSDA) and Financial Sector Deepening Zambia (FSDZ) which was formalised in April 2019, progress on the two flagship projects under the agreement was recorded as follows: i. Project to develop the Capital Markets Master Plan (CMMP) – In 2020, the Commission recorded notable progress concerning the development of the CMMP, a ten-year long￾term strategy for capital markets development. The milestones achieved included the following; • Establishment of the CMMP Steering Committee: The Ministry of Finance, in consultation with the Commission, appointed members of the CMMP Steering Committee comprising of high-level financial sector experts (from the public and private sector) was established to oversee the smooth development and implementation of the CMMP. • Stakeholder Engagements & development of a Market Assessment Report: Bourse Consult and Genesis Analytics, the consultants engaged in 2019 to coordinate the development of the CMMP, held various engagements with key stakeholders in the capital markets. The foregoing coupled with various research Our Partners on key projects Financial Sector Deepening Africa/Zambia CMMP & ICA MoU: Jan 2019 Toronto Centre Risk-Based Supervision & Other Trainings MoU: May 2019 UN Capital Development Fund Sandbox MoU: Mar 2020 Prudence Foundation Cha-Ching MoU: Sep 2019 Biodiversity Finance Initiative Green bonds CoC: Sept 2019 Chartered Institue of Securities & Investment Certifications MoU: Aug 2016

54 culminated into a Market Assessment Report (MAR). As such, the MAR included stakeholder views and a detailed desktop research of the Zambian macroeconomic environment, an international benchmarking for capital markets and an analysis of the legal / regulatory framework. Suffice to mention that the MAR was used as a basis to inform the development of the CMMP document. • CMMP Consensus building workshop: The Commission held a consensus building workshop to discuss the MAR findings and as such, engaged a broad list of stakeholders to facilitate a unified direction for the Zambian capital markets development. • Development of a Draft CMMP document: A draft CMMP document culminating from the MAR was developed and underwent the scrutiny of the joint CMMP Secretariat (the Ministry of Finance and the Commission), the Steering Committee and other key stakeholders. ii. Project to undertake an Institutional Capacity Assessment (ICA) – An institutional capacity of the Commission (initiated in 2019) whose objective was to look into the Commission’s internal structure for the purpose of identifying areas of strength and of improvement was completed in February 2020. The ICA Report produced by A2F Consultants (the consultants assigned to undertake the ICA) outlined priority recommendations to the Commission, which broadly included the following; • To have a defined Market Development Strategy; • To implement a Risk-Based Supervision; • To undertake a review of the Enforcement Process; and • To improve the Human Resource Management. Toronto Centre Partnership: Long-Term Engagement for Capacity Building (Risk Based Supervision and Gender-Technology-Financial Inclusion Supervision Project) Risk Based Supervision In May 2019, the Commission and the Toronto Centre of Canada entered into a 3-year Long-Term Country Engagement (LTCE) to implement Risk Based Supervision for the Zambian securities sector. The Commission expects to roll out RBS in the Quarter 2 of 2022. Development of the RBS framework contributes to the Commission’s strategic objectives, in particular:

1. Strategic objective 1 – Improve Investor protection by developing legal/ regulatory frameworks and developing enhanced regulatory capacity.
2. Strategic objective 3 – Improve stakeholder relationships by strengthening sensitization and enforcement programs.
3. Strategic objective 5 - Improve operational processes and systems by re-engineering, integrating and automating requisite systems. The Commission has achieved various milestones under the project as follows:

55 Task Status Develop Governance Framework for RBS Implementation Completed Identification and Selection of Pilot Candidates Completed Develop the RBS Policy Completed Development of tools and templates to capture supervisory assessments Completed Training for Pilot testing Completed Conduct Pilot testing and review pilot results* On-going following conclusion of inspections Revisions to the draft RBS policy* Completed. Final Policy to be approved by the SEC Board in 2021 In 2021 and beyond, the Commission expects to roll out the following activities under the project: Further to the execution of a partnership between the Commission and the Toronto Centre in 2019 to implement a Risk-Based Supervision Framework for the Securities sector, the two parties partnered in a two-phased project dubbed ‘Gender-Technology-Financial Inclusion Supervision Project’. Phase one of the project which was aimed at increasing the knowledge of the Commission and other Regulatory Authorities, financial institutions and financial services providers (among others), about the current conditions for Regulatory Technology (“RegTech”) readiness and using sex-disaggregated data for supervisory decision making was finalised in December 2020. Furthermore, phase two of the project which is set for launch in Quarter one of 2021 aims at providing expertise and resources to work with the Commission, to identify and develop self-assessment tools that can close identified gaps (from phase 1) or further the benefits of gender equality. Partnership with the United Nations Capital Development Fund (UNCDF) Further to the Commission and the UNCDF’s Certificate of Collaboration of September 2019, the two parties formalized the collaboration and entered a Memorandum of Understanding (MoU) Approval of RBS Policy by the SEC Board (Q1 2021) Development of small firms strategy (Q2 2021) Develop & implement Communications Strategy (Q2 2021) Re-engineering supervisory processes (Q2 2021) Finalise implementation Plan (Q4 2021) Implementation of RBS in the Zambian Capital Markets (Q2 2022)

56 effected in March 2020. The MoU provides a framework of cooperation to facilitate and strengthen collaboration between the two parties in areas of common interest. Furthermore, the MoU outlines identified areas of cooperation in the following areas: • To build capacity for Zambian Financial Technology (FinTech) entities & Small to Medium Enterprises on how capital markets work and options available to businesses looking to access capital. As part of the collaborative efforts, SEC facilitated a series of presentations dubbed ‘Regulatory navigation for Fintechs in Zambia’, organized by UNCDF and Bongohive Innovation and Technology Hub. • To support the creation and testing of Regulatory Sandboxes around new areas of interest, including but not limited to: Peer-to-peer lending and crowdfunding innovations. • To explore the ways the Commission and UNCDF can facilitate the inclusion of more women and youth in the Digital Economy of Zambia; and • To facilitate the increased access by Zambian FinTechs & Small to Medium Enterprises to microfinance and investment capital. A notable milestone recorded under the Commission’s partnership with the UNCDF is the succefull development of Guidelines for a Regulatory Sandbox Framework (“Sandbox”) for Capital Markets in December 2020. The Sandbox seeks to create a regulatory environment in which testing of capital markets innovations can be facilitated under a set of conditions and limitations designed to protect investors. It is anticipated that Participants of the Sandbox shall be entitled to Regulatory flexibility over a specified period of time to necessitate the smooth testing of their innovations and their future commercial deployment. Therefore, it is envisaged that the Sandbox is poised to position our local capital markets as an attractive market constituting of an enabling framework that enables potential participants to test their financial product or service as easily, conveniently, and efficiently as possible, in a timely and cost-effective manner, without placing undue risk on investors and the financial systems in general. The Commission envisages the sandbox to be a bridge that addresses concerns about regulatory compliance whilst ensures access to a vibrant and growing capital market. Partnership with the United Nations Biodiversity Finance Initiative (BIOFIN) In its efforts of ensuring that Capital Markets played a critical role to warrant Zambia’s attainment of the Seventh National Development Plan (7NDP) and the United Nations Sustainable Development Goals (SDGs) the Commission developed Green Bonds Guidelines (Guidelines). The Guidelines were a culmination of the partnership between Biodiversity Finance Initiative (BIOFIN) Project Team under the United Nations Development Plan (UNDP) and the Commission. The guidelines are meant to facilitate the orderly and transparent issuance of green bonds and enhance investor protection. Despite the negative impact of Covid-19 pandemic, the Commission registered some meaningful progress to further the Green Bonds project. Some of the activities undertaken included the following:

57 i) On 9th July 2020, DMSD participated in a webinar organized by the Capital Markets Association of Zambia in which the Green Bonds framework was explained and positioned as a ready-to-use sustainable financing solution. ii) On 17th August 2020, the SEC and BIOFIN submitted green bonds tax incentives to the Budget Preparations Committee’s Tax Policy Review Sub￾Committee. The proposed incentives included 1) Withholding Tax exemption for interest income earned on green bonds 2) A two-year reduction in corporate tax rate by 2% for bond issuers 3) Issuance costs to be allowable deductions for corporate tax 4) 5% reduction in the corporate tax rate SMEs who access funding through CISs iii) On 29th October 2020, the Commission participated in the BIOFIN Euro-Asia Pacific Regional Dialogue and delivered a presentation titled “Role of capital markets in supporting and filtering biodiversity positive investments: the case of Zambia”. iv) On 27th November, 2020 the Commission also participated in the launch of the “New Deal for Nature and People Campaign” hosted by World Wide Fund for Nature (WWF) where green bonds as a sustainable financing option was the core of a speech delivered. This engagement birthed a new movement between SEC, WWF and BIOFIN who have teamed up to reinforce awareness campaigns on green bonds with a view of leveraging the partners’ network to pursue Zambia’s debut issuance of a green bond. The team has planned a number of joint activities for next year (2021). Capacity Building | National Financial Inclusion | Awareness | Education We take cognizant of the fact that the lack of resources made it difficult to undertake some planned capacity building activities for both staff and the market at large in 2019. In 2020, the Commission leveraged on partners and the industry players in sponsoring major activities. Below are some of the key activities undertaken in 2020. National Strategy on Financial Education Phase II 2019 – 2024 (NSFE II) The National Strategy on Financial Education Phase II (NSFE-II) for the period 2019 -2024, was launched on 10th December 2019. Its overall strategic objective is for the Zambian population to have improved knowledge, understanding, skills, motivation, and confidence to help them secure positive financial outcomes for themselves and their families by 2024. The priority financial education programmes of the NSFE-II are organized around four themes on financial education for children, youths, adults, and all age groups. In the year 2020, flagship programs under the NSFE II included the following: 1) Cha-Ching Financial Education Programme; 2) Financial Literacy Week; and 2) Validation of the School Curriculum. Cha-Ching Financial Education Programme Further to the Commission’s partnership (executed in 2019) with Prudence Foundation (the community investment wing for Prudential Limited) and Junior Achievement (JA) Zambia to implement a financial education programme for children known as “Cha-Ching”, the partners in

58 collaboration with the Ministry of General Education officially launched the programme in February 2020. However, the actual implementation which was earmarked for Quarter 2 of 2020, targeting to reach at least 5,000 young leaners was disrupted by the onset of the global pandemic, Covid-19. Notwithstanding, the Commission, Prudence Foundation and JA have continued to engage the Ministry of General Education to advance plans to implement the programme. Commemoration of the 2020 Financial Literacy Week (FLW) The FLW is a recognition of the Global Money Week which endeavours to undertake Financial education to people of all ages through the following – financial education resources that can be disseminated, used and adapted in financial education programmes; delivered through websites, social media, print and other media channels; and annual campaigns (e.g., The Financial Literacy Week). The FLW which took place in March 2020, culminated into awards given to professionals that are dedicated to furthering financial education. Owing to the COVID-19 health restriction measures, the events were scaled down to a virtual audience. The awards were presented by the Bank of Zambia Deputy Governor on behalf of the Governor who is the Financial Literacy Champion in Zambia. Validation of the Ministry of Education School Curricula for Financial Education In November 2020, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) sponsored a three (3) days’ workshop hosted by the Ministry of Education and the Curriculum Development Centre with financial sector stakeholders that included the: - Ministry of Finance(MoF), Bank of Zambia (BOZ), Securities and Exchange Commission (SEC), Pensions and Insurance Authority (PIA), Zambia Revenue Authority (ZRA), Competition and Consumer Protection Commission (CCPC) for the purposes of updating and validating the school curriculum for financial education. Financial Sector Joint Messaging Campaign (FSJMC) Acting together as financial sector regulators, the Securities and Exchange Commission, the Bank of Zambia and the Pensions and Insurance Authorities deliberated on the increasing fraudulent scams at the Financial Sector Regulators Tripartite Meeting of 3rd June 2019, it was decided that there is need to conduct a joint financial sector communications campaign that would aim at creating awareness and sensitization about risky and usually illegal or unauthorized, thus unregulated financial products. The Campaign Strategy was developed and launched on 18th August 2020 by a Task Team comprising of technical and communications personnel from the SEC, BOZ and PIA. It was envisaged that the campaign would shift behaviours of current and potential investors from spontaneous uptake of products to more vigilant and responsible actions. SEC was charged with spearheading the development of the campaign concept and strategy. The campaign was developed to touch on problematic areas through which financial fraud emanates and the identified ones were as follows: - • Mobile Money Scams

59 • Pyramid Schemes • Network Marketing • Cryptocurrencies/Initial Coin Offerings • Fraud through the internet • Fraud through fake deals such as fake minerals. The FSJMC ran for and initial cycle making a measured reach of 14,000 individuals. The campaign is planned for continuation in 2021. Below is a statistical presentation of the initial reported reach. World Investor Week 2020

On 6th October 2020, the Commission in collaboration with the Capital Markets Association of Zambia joined the International Organization of Securities Commissions (“IOSCO”) in commemorating its fourth (4th) Annual WIW. The WIW is a public awareness campaign aimed at enhancing investor education and protection. The theme was ‘Be a Smart Investor through Capital Markets’ and emphasis was placed on behavioural aspects of self- responsibility. Activities that were undertaken included a media launch by the SEC CEO, Mr. Phillip Chitalu, University Panel Discussion, University Essay Competition, Secondary School Talks, Virtual Exhibition of Regulator and Capital Market Operators, Newspaper etc. Number of hits on social media

• 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2,774 5,088 8,715 6,297 10,039 10,003 13,949 5,034 Intro video 3,173 Poncho video Mobile money flyer Network marketing Fake deals flyer Insurance scams Pyramid schemes Crypto currencies FraudulentInvestments STATISTICAL REPORT FOR Cycle 1 Of The FSJMC

60 E-flyers distributed during the World Investor Week 2020 National Financial Inclusion Strategy As a co-implementor of the National Financial Inclusion Strategy, the Commission participated in two key projects as highlighted below. i. 2020 Finscope Survey: As a member of the Finscope project team, the Commission took parti in the following Finscope activities; • Finscope Training of Trainers workshop in preparation for the survey fieldwork. • Review and finalization of the Finscope Questionnaire. • Review and finalization of the Enumerators manual. In view of the above, the Commission was assigned a task to facilitate and conduct the training of enumerators and to oversee their deployment in the Muchinga Province. As such, the Commission in collaboration with Zamstats and the Association of Microfinance Institutions of Zambia conducted the training of twenty-six (26) enumerators and five (5) supervisors from 20th – 31st August 2020 in Chinsali, Muchinga Province. Furthermore, the SEC participated in the monitoring of field work from 1st t0 7th September 2020. Enumeration areas visited during the field work included Isoka and Mpika. The data collection exercise was completed on 21st September 2020 and the 2020 Finscope Survey was launched on 17th December 2020. ii. NFIS Communications Strategy: The Commission participated in the formulation and implementation of the NFIS Communications Strategy. The purpose of the Strategy is to ensure a fully integrated approach to communication which is aligned to the NFIS that will facilitate the achievement of its goals and targets and to achieve increased awareness of the financial services available to all Zambians especially the most

61 vulnerable groups identified in the strategy. The primary target audiences of the NFIS Communications Strategy are the financially excluded who include (among others): 1) Youth; 2) Women; and 3) People living with disabilities. The Communication strategy was launched on 25th November 2020 and an illustration of campaign messages is shown in the images below. An illustration of NFIS campaign messages being disseminated Capacity building Under the Chartered Institute for Securities and Investments (CISI) – Zambia Regulatory Assessment Module The SEC/CISI partnership was effected in August 2016 through execution of a Memorandum of Understanding with a view to provide an effective framework for collaboration between the parties in the development of a formal certification programme for the capital markets sector practitioners. Under the partnership, the SEC has adopted the following courses: i. International Introduction to Securities and Investment (Africa) ii. Local Regulatory Assessment Module iii. Technical Modules such as: • Global Securities • Risk/Operational Risk • Investment Management Pilot Training on the Zambia Regulatory Assessment Module Having successfully launched the first module being the International Introduction to Investment in September 2016, the SEC working together with the CISI have developed the Local Regulatory Module. The module seeks to develop local knowledge regarding the required industry regulations for professionals working in the particular jurisdiction in this case, Zambia.

62 The pilot training for the Regulatory Module was undertaken virtually, from 20th to 23rd October and exams from 2nd to 4th December 2020.The pilot training undertook to train not only professionals from SEC but gave opportunity to other institutions in the financial industry as follows: - • The Ministry of Finance • Lusaka Securities Exchange Plc • Pensions and Insurance Authority • Bank of Zambia • Capital Markets Association of Zambia CISI Regulatory Module Assessment Exam in progress Other capacity Building included training of SEC employees through the Toronto Centre partnership and regional bodies such as the Macro Economic Financial Institution (MEFMI). Recognition of the Capital Markets Association of Zambia as a Self-Regulatory Organisation The SEC on 9 th December, 2020 granted the Capital Markets Association of Zambia (CMAZ) recognition as a Self-Regulatory Organisation (SRO). The SRO recognition gives CMAZ the power to regulate the standards of practice and business conduct of its members in accordance with its by-laws, rules, policies, practices and interpretations.

63 SEC Vice Chairperson Mr George Nonde officially hands over Certificate of Award of Recognition as SRO to CMAZ president Mr. Nicholas Kabaso as SEC CEO Mr. Phillip Chitalu looks on. ENFORCEMENT AND LEGAL SERVICES Although 2020 was a challenging year for the Commission and the Directorate of Enforcement and Legal Services (DELS) in particular with Covid-19 and internal resource constraints, the directorate has been able to find solutions that have helped navigate the challenging period which may best be described as a period of crisis. The Chinese use two brush strokes to write the word “crisis”. One brush stroke stands for danger, the other for opportunity. Thus, in the 2020 year of crisis, DELS was made aware of the danger but have similarly recognized the opportunity by leveraging, for instance, on technology to undertake consultations for law review that had not progressed due to financial constraints. In addition, DELS has capitalized on partnerships with other law enforcement agencies such as the Zambia Police and the Drug Enforcement Commission that have assisted with investigation of matters, especially those with criminal aspects. DELS Functions DELS is a critical unit in the Commission’s investor protection mandate. Specifically, the Directorate performs the following main functions: Enforcement; Legislative development; Legal advisory and Corporate functions. Thus, the Commission, through DELS, is responsible for enforcing the Securities regulatory framework as prescribed by the Securities Act, No. 41 of 2016 (Act) and the Rules and Regulations made thereunder. DELS is responsible, inter alia, for ensuring legal and regulatory

64 compliance by capital market operators, identifying and recommending law reform and development of the regulatory framework, and providing corporate legal advisory and Board secretarial services. The core functions of DELS are divided between litigation, investigation and enforcement. DELS undertakes litigation on behalf of the Commission in all courts and Tribunals, and investigates alleged violations of the securities regulatory framework to ensure the growth of an orderly capital Markets and safeguard the interest of persons who invest in securities in order to guard against illegal and improper practices as provided under the Act and regulations or rules made there under. Law Reform and stakeholder engagements The capital markets the world over are a heavily regulated space, justifiably so because of the investor protection mandate that securities regulators are responsible for. DELS co-ordinates the development of legislation for the enhancement of the Commission’s supervisory and capital market development mandate in Zambia. International best practice now champions a risk-based approach to anti-money laundering, counter-terrorist financing and counter￾proliferation financing (AML/CFT/CPF) as opposed to a compliance-based approach. In compliance with international best practice, and in order to effect consequential amendments to the Financial Intelligence Centre Act (FICA), the Ministry of Finance adopted a policy to implement a risk-based approach to AML/CFT/CPF throughout the financial sector. To this end, the Commission engaged in an amendment exercise for the implementation of a risk-based framework for AML/CFT/CPF in the supervision of the capital markets and thereby align the securities regulatory framework with international best practice. A draft bill incorporating the proposed amendments to the Act has been formulated and submitted to the Ministry of Finance for approval and onward submission to the Ministry of Justice. Furthermore, for the first time in 28 years, the Commission is spearheading a drastic overhaul of the subsidiary legislation prescribed under the Act. To this end, the Commission had commenced the process of engaging in stakeholder consultations and, with the guidance of the Business Regulatory Review Agency, will undertake a regulatory impact assessment to determine the impact of the proposed rules and regulations on business activity. To ensure widespread engagement with stakeholders, the said draft rules and regulations have been disseminated through email and published on the Commission’s website and a call for comments made on the Commission’s social media platforms. Furthermore, an advert was published in print media informing the public of the existence of the said draft legislations and requesting submissions from interested parties. The following draft subsidiary legislation form part of the stakeholder consultations and regulatory impact assessment: a) the Securities (Capital Market Operators) (Complaints Handling Requirements) Rules; b) the Securities (Registration of Securities) Regulations; c) the Securities (Recognition of Self-Regulating Organisations) Regulations d) the Securities (General Requirements) Rules;

65 e) the Securities (Capital Market Operators) (Licensing and Operations Requirements) Rules; f) the Securities (Capital Markets Operators) (General Licensing Procedures and Requirements) Regulations; g) the Securities (Collective Investment Schemes) Rules; h) the Securities (Collective Investment Schemes Authorisation) Regulations; i) the Securities (Fees and Levies) Rules, 2020; and j) the Securities (Compensation Fund) (Amendment) Regulations. In addition to the Securities Act and the rules or regulations made thereunder, the Commission employs the use of various other regulatory tools such as guidelines, directives and circulars. DELS has, in conjunction with the Directorate of Market Supervision and Development (DMSD) and the Directorate of Finance and Administration (DFA), assisted in the drafting and formulation of the following Guidelines that have been published in the Government Gazette and are in force: a) the Securities (Commercial Paper) Guidelines, 2020; b) the Securities (Green Bond) Guidelines, 2020; c) the Securities (Real Estate Investment Trust) Guidelines, 2020; and d) the Regulatory Sandbox Guidelines for Capital Markets, 2020. The Capital Markets Tribunal A significant development introduced by the Act is the establishment a specialised adjudicator to resolve disputes between the Commission and Capital Market Operators. The Capital Markets Tribunal (Tribunal) is established under section 184(1) of the Act. On 20th May 2020, the members of the Tribunal were sworn into office by the Chief Justice of Zambia, Madam Justice Irene Mambilima. The Honourable Chief Justice, Irene Mambilima (center) poses for a picture with the Chairperson of the Tribunal, Mrs. Chanda Nkholoma Tembo (right) and the Vice Chairperson of the Tribunal, Mr. Martin Muyayi Lukwasa (left)

66 The Chief Justice swears Mrs. Chanda Nkholoma Tembo into the office of Chairperson of the Tribunal as the Chief Registrar, Mr. Charles Kafunda looks on In her congratulatory remarks, the Hon. Chief Justice reminded the members of the tribunal to uphold the principals of natural justice in the exercise of their duties, as well as the need for expediency in dispute resolution. Her Ladyship expressed her faith in the complimentary competencies of the members of the tribunal and emphasized the importance of their role in impacting the Zambian economy. She further advised the members of the tribunal to guard against falling into backlog and highlighted the interventions by the Judiciary in dismantling backlog through the Taskforce on Backlog created in June 2018. In order to be operational, the tribunal requires rules that govern the procedure to be applied in appeals and other proceedings before it. The draft Capital Market Tribunal Rules were therefore reviewed by the newly appointed members and subjected to a stakeholders’ consultative review on 16th July 2020, at which event representatives of DELS were present to make submissions on behalf of the Commission. The amendments suggested at the said stakeholders’ review were incorporated in the draft Rules and the draft, as reviewed have since been submitted for the consideration of the Honorable Chief Justice’s Office and will subsequently be submitted to the Ministry of Justice for finalization. The Commission awaits the operationalization of the Tribunal through the enactment of the rules to govern the Tribunal’s processes and procedures. Enforcement and legal actions taken Since the enactment of the Act, the Commission has continued to enforce the provisions of the Act against defaulting capital market operators. Depending on the circumstances of each case, the enforcement actions taken have ranged from private censures for minor infractions to

67 imposition of fines, revocation of licenses or taking supervisory action under section 11(4) of the Act for serious breaches of the regulatory framework. During the period under review, the Commission took supervisory possession of two major Capital Market Operators pursuant to section 11(4) of the Act to safeguard the interests of investors and ensure compliance with the Act. The Commission also revoked the licenses of two individuals that were deemed not to be fit and proper persons to hold dealer’s representative licenses. Additionally, to ensure compliance with the regulatory framework and deter would be offenders, the Commission imposed administrative penalties that consisted of private censures and imposition of administrative fines on capital market operators that breached its regulatory framework. Furthermore, in a quest to ensure compliance with Commission issued directives, the Commission imposed an administrative fine on one of the custodians of securities in the capital markets for failing and/or neglecting to comply with the directive to recompense the assets belonging to a Unit trust that should have been in its custody. This penalty will ensure that custodians observe high standards of care when discharging their duties to ensure that assets in their custody are sufficiently secured. During the period under review, DELS has also successfully represented the Commission in judicial review proceedings before the High Court for Zambia. Compliance with regulatory requirements and international best practice DELS ensures that as a financial services regulator, the Commission complies with legal and regulatory requirements that facilitate effectiveness in capital markets regulation. This includes compliance with international regulatory requirements and best practices of IOSCO, ESAAMLG, CISNA, AMERC and other regional and international bodies. DELS is the contact point for liaison with foreign capital market regulators on information sharing and exchange of information. The Commission is a signatory to the International Organisation of Securities Commissions (IOSCO) Multilateral Memorandum of Understanding (MMoU). During the period under review, the Commission received two requests to conduct investigations on behalf of two different foreign regulators to investigate false and/or misleading information that had the potential to manipulate the market value of listed securities and thereby adversely affect the Zambian capital markets. One of the investigations conducted under the IOSCO MMoU resulted in the imposition of an administrative penalty on an individual who contrived section 161 (5) (d) of the Act by providing false and/or misleading information to a Commission appointed investigator during an investigation. Furthermore, as part of its regulatory role, the Commission made four requests for information to Mauritius, Seychelles, South Africa and Zimbabwe to undertake background checks to assess the fitness and probity of certain entities intent on operating in the Zambian capital markets. With the advent of the COVID-19 pandemic, participation in the regional and international bodies to which the Commission is affiliated as a member has been limited. For instance, ESAAMLG was able to hold its regular meetings virtually and the Commission, represented by DELS and DMSD, was able to attend.

68 Cooperation with other financial players and stakeholders’ regulators Section 165(1) of the Act empowers the Commission to consult and cooperate with other regulators in the financial sector. The Act also mandates the Commission to co-operate with, provide assistance to, receive assistance from, and exchange information with, other regulatory bodies and law enforcement agencies (LEAs). In view of this mandate, the Commission has, after investigating several cases, referred the cases to organisations such as the Bank of Zambia and the Drug Enforcement Commission whenever a matter was outside the Commission’s jurisdiction. Due to the complex nature of securities transactions, the Commission has also gone a step further by assisting the organisations to which it refers matters by providing the organisations with any additional information required as well as conducting joint investigations. As such, during the period under review the Commission has investigated and referred to the Bank of Zambia several cases involving suspected pyramid schemes and money circulation schemes in contravention of the Banking and Financial Services Act, No.7 of 2017. The Commission through DELS has also referred cases involving suspected fraudulent practices and money Laundering activities to be investigated by relevant Law Enforcement Agencies (LEAs) as the Commission does not have jurisdiction to undertake criminal investigations or prosecutions. MARKET TRANSACTIONS The Securities Act requires securities including collective investments schemes to be offered to the public to be registered with the Commission. The Commission also approves mergers or acquisitions involving entities whose securities are registered with the Commission. The registration of securities and authorization of CIS is among one of the ways the Commission protects investors in the capital markets, while the rules on takeovers and mergers also ensure that takeovers and mergers are conducted in an orderly manner that protects minority shareholders. The Market Transactions section within the Directorate Finance and Administration during the year ending December 2020 received and processed several applications from companies including those relating to the registration of securities, mergers and acquisitions. Waivers from certain Securities Act obligations as enshrined in the Act, and other miscellaneous market activities were also considered. The table below shows the companies, type and number of securities that were approved during the period under review:

69 DATE COMPANY TYPE AND NUMBER OF SECURITIES/OR TRANSACTIONS DATE APPROVED/ DEFERRED PURPOSE OF MEETING 06.02.2020 African Life Financial Services Private Equity Fund Collective Investment Scheme 06.02.2020 To consider the authorization of African Life Financial Services Private Equity Fund 06.02.2020 Standard Chartered Bank Zambia Plc Collective Investment Scheme 06.02.2020 To consider the authorization to promote Blackrock Global Funds to Standard Chartered Zambia Plc clients 29.05.2020 African Life Financial Services Waiver 29.05.2020 To consider application for exemption from rule 63 of the Securities (Collective Investment Scheme) 29.05.2020 Standard Bank Zambia Plc Waiver 29.05.2020 To consider application for a waiver of outstanding Collective Investment Scheme levies 29.05.2020 Prima Reinsurance Plc Registration 29.05.2020 To consider the application of 45 million ordinary shares of par value ZMW 1.00 29.05.2020 African Life Financial Services waiver 29.05.2020 To consider the application for adjustment in conditional authorization 29.07.2020 BPL Investment Limited Waiver 29.07.2020 To consider the application for a waiver from making a mandatory offer to Copperbelt Energy Corporation Africa Investment Limited minority shareholders. 02.09.2020 Zambia State Insurance Corporation Life Plc Registration 02.09.2020 To consider the registration of 240,000,500 Ordinary shares of Par value ZMW 0.05 09.12.2020 Standard Chartered Bank Zambia Plc Collective Investment Scheme 09.12.2020 To consider the application for authorization to distribute AllianceBernstein SICAV 09.12.2020 Standard Chartered Bank Zambia Plc Collective Investment Scheme 09.12.2020 To consider the application for authorization to distribute AllianceBernstein FCP 09.12.2020 Investrust Bank Plc Registration 09.12.2020 To consider the application for the registration of 40,825,475 ordinary shares of par value ZMW 1.00

70

96 Appendix I The SEC Staff in 2020 Name Position Date Left Mr. Phillip K. Chitalu Chief Executive Officer - Mrs. Diana Sichone Commission Secretary and Director – Enforcement and Legal Services

Ms. Mutumboi Mundia Director - Market Supervision and Development

Mr. Bruce Mulenga Manager - Market Transactions and Investments

Mr. Mateyo Lungu Manager – Finance - Mr. Saul Nyalugwe Manager – Administration - Mr. Abraham Alutuli Manager – Market Supervision - Mr. Nonde Sichilima Manager – Market Supervision - Mrs. Dingase Makumba Manager – Market Development - Mr. Lubunda Ngala Manager – Law Reform and Enforcement 02.04.2020 Mr. Mubanga Kondolo Manager – Financial Inclusion - Mrs. Sitali Mugala Product Development and Market Research Officer

Ms. Racheal M. Banda Human Resource Officer - Mrs. Leah Simasiku Surveillance Officer - Mrs. Veronica O. Sichone Acting Manager – Law Reform and Enforcement 05.12.2020 Mr. Thomas Thole Investigations Officer - Ms. Gertrude Buyungwe Analyst/Inspection Officer - Mr. Benson Mwileli Analyst/Inspection Officer - Mr. Sydney Katumba Information Technology Officer - Mrs. Theresa Chimbila Accounts Assistant - Ms. Priscilla Mwale Personal Assistant to the CEO - Ms. Siberia T. Siamayuwa Pool Secretary - Mr. Saviour Mooya Driver - Mr. Alexander Tondo Office Assistant -

97 SEC Management and Staff

98 Appendix II List of Authorised Capital Market Players as at 31st December, 2020 In order to ensure that only fit and proper persons and entities are allowed to offer securities services to the investing public, the Commission approved the applications of the following entities to conduct securities business in the categories shown below: Dealer’s Licenses The following corporate entities held a Dealer’s license as at 31st December, 2020: Dealer’s Representative Licenses The following persons held a Dealer’s representative’s license as at 31st December, 2020: Item Company Name 2020 2019 Yes No Yes No

1. Aflife Capital Zambia Limited √ √
2. Aflife Holdings Zambia Limited √ √ 3 Aflife Private Wealth Limited √ √
3. African Banking Corporation Investment Services Limited √ √
4. African Banking Corporation Zambia Limited T/a Atlas Mara Bank Zambia Limited √ √
5. African Life Financial Services Limited √ √
6. Altus Capital Limited √ √
7. Autus Securities Zambia Limited √ √
8. Absa Bank Zambia Plc √ √
9. Citibank Zambia Limited √ √
10. Equity Capital Resources Plc. √ √
11. Finance Securities Limited √ √ 13 First National Bank Zambia Limited √ √
12. Hobbiton Investments Services Limited √ √
13. Investrust Bank Plc √ √
14. Kukula Capital Limited √ √
15. Laurence Paul Investment Services Ltd √ √
16. Longhorn Associates Limited √ √
17. Madison Asset Management Company Ltd √ √
18. Pangaea Securities Limited √ √
19. Prudential Life Assurance Limited √ √
20. Prudential Pension Management Zambia Limited √ √
21. Stanbic Bank (Z) Limited √ √
22. Standard Chartered Bank (Z) Limited √ √
23. Stockbrokers Zambia Limited √ √
24. Thirty Thirty Capital Limited √ √
25. Zambia National Commercial Bank Plc √ √

99 Item Name of Representative Dealer 2020 2019 Yes No Yes No 1 Mukudzei-Ishe Zhou Aflife Capital Limited √ √ 2 Fortunate Ngatsha Aflife Holdings Zambia Limited √ √ 3 Munakupya Hantuba Aflife Private Wealth Limited √ √ 4 Danny Mulenga African Banking Corporation Investment Services Limited √ √ 5 Nicholas Kabaso African Banking Corporation Investment Services Limited √ √ 6 Zangose Mwanza African Banking Corporation Investment Services Limited √ √ 7 Michelle M. Musonda African Banking Corporation Investment Services Limited √ √ 8 Clifford Muzoka African Banking Corporation Investment Services Limited √ √ 9 Richard Ndhlovu African Banking Corporation Zambia Limited √ √ 10 Christopher K Mwelo African Banking Corporation Zambia Limited √ √ 11 Theresa Chiluba African Banking Corporation Zambia Limited √ √ 12 Mubanga Bwalya African Banking Corporation Zambia Limited √ √ 13 Geoffrey Musekiwa African Life Financial Services Limited √ √ 14 Vannessa K. Wright African Life Financial Services Limited √ √ 15 Jones Phiri African Life Financial Services Limited √ √ 16 Mumba Musunga African Life Financial Services Limited √ √ 17 Valerie M. Mwiinga African Life Financial Services Limited √ √ 18 Joseph Mazila African Life Financial Services Limited √ √ 19 Nasilele Ngumbi African Life Financial Services Limited √ √ 20 Ken Simwaba Altus Capital Limited √ √ 21 Cecilia Kamba Siabusu Altus Capital Limited √ √ 22 Mataka Nkhoma Autus Securities Zambia Limited √ √ 23 Fumanikile Bbuku Autus Securities Zambia Limited √ √ 24 Joseph Simate Autus Securities Zambia Limited √ √ 25 Aaron Phiri ABSA Bank Zambia Plc √ √ 26 Boston Nkuname ABSA Bank Zambia Plc √ √ 27 Mukelebai Wambulawae ABSA Bank Zambia Plc √ √ 28 Lesa Mulenga ABSA Bank Zambia Plc √ √ 29 Stanley Kaweme Tamele ABSA Bank Zambia Plc √ √ 30 Selorm Kwami Andre ABSA Bank Zambia Plc √ √ 31 Hamubbatu Hanakoma ABSA Bank Zambia Plc √ √ 32 Carmen Hachandi ABSA Bank Zambia Plc √ √ 33 Ngosa Mary Kafwembe Citibank Zambia Limited √ √ 34 Steven Chitete Citibank Zambia Limited √ √

100 Item Name of Representative Dealer 2020 2019 Yes No Yes No 35 Victor Zimba Citibank Zambia Limited √ √ 36 Choongo Chibawe Equity Capital Resource Plc √ √ 37 Sabera Khan Equity Capital Resources Plc √ √ 38 Cornwell Fungai Musana Equity Capital Resources Plc √ √ 39 Nathan DeAssis Equity Capital Resources Plc √ √ 40 Barkat Ali Finance Securities Limited √ √ 41 Gerald Ndhlovu First National Bank Zambia Limited √ √ 42 Kapumpe Chola Kaunda First National Bank Zambia Limited √ √ 43 Ignatius Innocent Kashoka First National Bank Zambia Limited √ √ 44 Naomi Hara Palale First National Bank Zambia Limited √ √ 45 Chali Maria Mulenga First National Bank Zambia Limited √ √ 46 Celine P. Chauwa Hobbiton Investment Management Services Limited √ √ 47 Mwangala Mwiya Hobbiton Investment Management Services Limited √ √ 48 Richard Mutukwa Investrust Bank Plc Limited √ √ 49 Jito Kayumba Kukula Capital Limited √ √ 50 Tue Andersen Kukula Capital Limited √ √ 51 Aaron Yobe Zulu Laurence Paul Investment Services Limited √ √ 52 Martyn Banda Laurence Paul Investment Services Limited √ √ 53 Namoonga Malambo Laurence Paul Investment Services Limited √ √ 54 Chiwoni Soteli Longhorn Associates Limited √ √ 55 Mercedes Mwansa Madison Asset Management Company Limited √ √ 56 Blessing Chilombe Madison Asset Management Company Limited √ √ 57 Mupanga Chilungu Madison Asset Management Company Limited √ √ 58 Claire Machila Lungwe Madison Asset Management Company Limited √ √ 59 Siphiwe Nkunika Madison Asset Management Company Limited √ √ 60 Nkumbu P Pelekamoyo Madison Asset Management Company Limited √ √ 61 Ceaser Siwale Pangaea Securities Limited √ √ 62 Tidale Mwale-Chisunka Pangaea Securities Limited √ √ 63 Wendy Nsamwa Nglazi￾Tembo Pangaea Securities Limited √ √ 64 Matete M. Sichizya Prudential Life Assurance Zambia Limited √ √ 65 Prabhleen Kohli Prudential Life Assurance Zambia Limited √ √

101 Item Name of Representative Dealer 2020 2019 Yes No Yes No 66 Ernest Kando Prudential Pension Management Zambia Limited √ √ 67 Alinani Simbule Stanbic Bank Zambia Limited √ √ 68 Chenge Besa Mwenechanya Stanbic Bank Zambia Limited √ √ 69 Chitemwe Ng'ambi Kapaya Stanbic Bank Zambia Limited √ √ 70 Dean Nathaniel Onyambu Stanbic Bank Zambia Limited √ √ 71 Mwila Pascal Mwenya Stanbic Bank Zambia Limited √ √ 72 Musenge Komeki Stanbic Bank Zambia Limited √ √ 73 Prudence Khumbo Mhango Stanbic Bank Zambia Limited √ √ 74 Veronica Sinkala Stanbic Bank Zambia Limited √ √ 75 Victor Chileshe Stanbic Bank Zambia Limited √ √ 76 Mintu Chitebe Stanbic Bank Zambia Limited √ √ 77 Benjamine N. Mulenga Standard Chartered Bank (Z) Plc √ √ 78 Chimuka Muyovwe Standard Chartered Bank (Z) Plc √ √ 79 Davy Nanduba Standard Chartered Bank (Z) Plc √ √ 80 Derek Bobo Standard Chartered Bank (Z) Plc √ √ 81 Dorothy N. K Moono Standard Chartered Bank (Z) Plc √ √ 82 Edna Towela Lungu Standard Chartered Bank (Z) Plc √ √ 83 Joseph Chibwe Ngesa Standard Chartered Bank (Z) Plc √ √ 84 Kabwe Mwaba Standard Chartered Bank (Z) Plc √ √ 85 Kayeba Mwenechanya Standard Chartered Bank (Z) Plc √ √ 86 Mubanga Yvonne Mukuka Standard Chartered Bank (Z) Plc √ √ 87 Muchindu Lombe Standard Chartered Bank (Z) Plc √ √ 88 Mulolwa Nkata Kamana Standard Chartered Bank (Z) Plc √ √ 89 Mwaka Kalenga Mfula Standard Chartered Bank (Z) Plc √ √ 90 Mwali Chisala Standard Chartered Bank (Z) Plc √ √ 91 Oluseggun M. Omoniwas Standard Chartered Bank (Z) Plc √ √ 92 Sampa David Shiyunga Standard Chartered Bank (Z) Plc √ √ 93 Ravi Kapadia Standard Chartered Bank (Z) Plc √ √ 94 Tamara M. Bbuku Standard Chartered Bank (Z) Plc √ √ 95 Wiggins Mupango Standard Chartered Bank (Z) Plc √ √ 96 Valarie M. Chulu Standard Chartered Bank (Z) Plc √ √ 97 Fred C. Kabombo Standard Chartered Bank (Z) Plc √ √ 98 Bwalya Kasito Standard Chartered Bank (Z) Plc √ √ 99 Kangwa Chola Chengo Standard Chartered Bank (Z) Plc √ √ 100 Mulenga Kawimbe Standard Chartered Bank (Z) Plc √ √ 101 Kamungoma Mate Stockbrokers Zambia Limited √ √ 102 Maxime Chiluba Harlaar Stockbrokers Zambia Limited √ √ 103 Charles Mate Stockbrokers Zambia Limited √ √ 104 Jack Kanyanga Stockbrokers Zambia Limited √ √ 105 Boniface Mwamba Stockbrokers Zambia Limited √ √

102 Item Name of Representative Dealer 2020 2019 Yes No Yes No 106 Kadidja M Sidibe Thirty Thirty Capital Limited √ √ 107 Austin Hamukonka Chijikwa Zambia National Commercial Bank Plc √ √ 108 Charles Kamungu Zambia National Commercial Bank Plc √ √ 109 Cliff George Sakala Zambia National Commercial Bank Plc √ √ 110 Fredrick Mulenga Kaputo Zambia National Commercial Bank Plc √ √ 111 Kaluba Gloria Kaulugombe Zambia National Commercial Bank Plc √ √ 112 Kunda Catherine Chikumbi Zambia National Commercial Bank Plc √ √ 113 Virginia L. Mwalilino Zambia National Commercial Bank Plc √ √ 114 Lishala Clarence Situmbeko Zambia National Commercial Bank Plc √ √ 115 Tiyeze Chilembo Zambia National Commercial Bank Plc √ √ 116 Nana Mukwiza Zambia National Commercial Bank Plc √ √ 117 Mudenda Sikapoto Zambia National Commercial Bank Plc √ √ 118 Ivor Chambwe Zambia National Commercial Bank Plc √ √ 119 Nyangu Florence Mkalipi Zambia National Commercial Bank Plc √ √ 120 Roy Mwambai Zambia National Commercial Bank Plc √ √ 121 Chewe Mwila Zambia National Commercial Bank Plc √ √ 122 Jibinga Kelly Jibinga Zambia National Commercial Bank Plc √ √ 123 Kennedy Zeula Zambia National Commercial Bank Plc √ √ Investment Adviser’s License The following corporate entities held an Investment Advisors license as at 31st December, 2020: Item Company 2020 2019 Yes No Yes No

1. Allied Securities and Asset Management Limited √ √ 2 Benefit Consulting Services Limited √ √
2. Charles Sichangwe √ √
3. DeVere and Partners Investment Services (Z) Limited √ √
4. Enock Bwalya √ √
5. Errol Neal Molver √ √
6. Riscura Limited √ √
7. Simon Kalunga √ √
8. Vunani Asset Management Limited √ √ Investment Adviser’s Representative License The following persons held an Investment Advisors Representatives license as at 31st December, 2020:

103 Item Company Name Investment Advisor 2020 2019 Yes No Yes No

1. Joost Groenveld Allied Securities and Asset Management Limited √ √
2. Collina B. Halwampa Benefit Consulting Services Limited √ √
3. Kandiye T. Liweleya Benefit Consulting Services Limited √ √
4. Chibamba Nyangu deVere and Partners International Limited √ √
5. Lynda Syamunyangwa deVere and Partners International Limited √ √
6. Maureen Nabulyato deVere and Partners International (Z) Limited √ √
7. Gift Kapande deVere and Partners International (Z) Limited √ √
8. Julian Visser deVere and Partners International (Z) Limited √ √
9. Arthur Kalumba deVere and Partners International (Z) Limited √ √
10. Dennis Nyirongo deVere and Partners International Limited √ √
11. Wenu Mutiti deVere and Partners International Limited √ √
12. Lwiindi Muzongwe deVere and Partners International Limited √ √
13. Mosses M Sibongo deVere and Partners International (Z) Limited √ √
14. Zamiwe Ndhlovu deVere and Partners International (Z) Limited √ √
15. Michelle T. M. Banda deVere and Partners International (Z) Limited √ √
16. Theresa Gumbo deVere and Partners International (Z) Limited √ √
17. Mubanga Nundwe deVere and Partners International (Z) Limited √ √
18. Elizabeth Nampasa deVere and Partners International (Z) Limited √ √
19. Charity Siwale Riscura Zambia Limited √ √
20. Cindy Waheeb Taudrous Riscura Zambia Limited √ √
21. Munyumba Mutwale Vunani Asset Management Limited √ √ Securities Exchange Licenses The following entities held a securities exchange license as at 31st December, 2020: Item Company Name 2020 2019 Yes No Yes No
22. Bond & Derivatives Exchange Zambia Plc √ √
23. Lusaka Securities Exchange Plc √ √

104 Appendix III Contact Details of Capital Market Players Securities Exchanges contact details LuSE PLC BaDEx PLC Chief Executive Officer: Mrs. Priscilla Sampa Address (physical): Lusaka Securities Exchange 2 nd floor, Mamco House Plot 316B, Independence Avenue Address (postal): P.O. Box 34523 Lusaka Telephone: +260 (211) 228594/228537 Facsimile: +260 (211) 225969 E-mail: info@luse.co.zm Chief Executive Officer: Mr. Peter Sitamulaho Address (physical): Bonds and Derivatives Exchange Zambia Plc Plot No 7450, Katopola Road Rhodespark, Off Great East Road Address (postal): Post. Net Box 334 Private bag E10 Arcades Lusaka Telephone: +260 (211) 220537 Facsimile: +260 (211) 220574 E-mail: info@badex.co.zm Dealers’ Contact Details a) Members of the LuSE Autus Securities Limited 34 Khola Road Woodlands Lusaka P. O. Box 320308 Tel: +260 (211) 840513, +260 761 002002, +260 761 003003 Email: mataka@autussecurities.com www.autussecurities.com Equity Capital Resources Plc 4 th Floor Godfrey House, West Wing Kabelenga Road Lusaka Tel: +260 (211) 840313, 227518 Email: info@ecrinvestments.com Website: www.ecrzambia.com

105 Hobbiton Investment Management Zener Office Park Stand No. 2287/A Corner Lagos & Lubuto Rds Lusaka P.O Box 32350 Tel: +260 (211) 232877, +260 956 529 966, Email: mimi.lungu@hobbiton.co.zm Madison Asset Management Company Ltd Plot 316, Independence Avenue P.O. Box 37013 Lusaka Tel: +260 (211) 255121/257152 Fax: +260 (211) 253417 Email: mupanga@madisonassets.co.zm www.madisonassets.co.zm Pangaea Renaissance Securities Ltd Pangaea Securities Limited 2nd Floor, Pangaea Office Park Stand 2374 Great East Road Lusaka Tel: +260 (211) 220707 Fax: +260 (211) 220925 Email: mbuto@pangaea.co.zm Stockbrokers Zambia Limited 32 Lubu Road Longacres P O Box 38956, Lusaka Tel: +260 (211) 227303/232456 Fax: +260 (211) 224055 Email: jkanyanga@sbz.com.zm Website: www.sbz.com Zambia National Commercial Bank Plc Head Office Building Cairo Road -South End P O Box 33611 Lusaka Tel: +260 211 425 650, Mobile: +260977 873262 Fax: + 260 (211) 223084 E-mail: Kaluba.kaulungombe@zanaco.co.zm Website: www.zanaco.co.zm

106 b) Other Dealers African Banking Corporation Investment Services Limited Atlas Mara Head Office Ground Floor, Pyramid Plaza Corner Church and Nasser Roads P.O. Box 39501 Lusaka Tel: +260 (211) 257970-6 E-mail: nkabaso@bancabc.com Website: www.atlasmarazambia.com Aflife Capital Zambia Limited Plot No. 74 Independence Avenue 4th Floor, Mpile House P.O. Box 37501 Tel: +260 (211) 253772 Fax: +260 (211 253112 E-mail: Faith@aflife.co.zm Aflife Holdings Zambia Limited Plot No. 74 Independence Avenue 4th Floor, Mpile House P.O. Box 37501 Tel: +260 (211) 253772 Fax: +260 (211 253112 E-mail: Faith@aflife.co.zm African Banking Corporation Zambia Limited (Trading as Atlas Mara Bank Zambia Limited) Atlas Mara House, Corner Church and Nasser Roads, P O Box 39501, Lusaka Ground Floor, Atlas Mara House LUSAKA Tel: +260 211 229733-40 E-mail: jkoni@bancabc.co.zm website: www.atlasmarazambia.com Aflife Private Wealth Limited Plot No. 74 Independence Avenue 4th Floor, Mpile House P.O. Box 37501 Lusaka Tel: +260 (211) 253772 Fax: +260 (211 253112 E-mail: Alex@aflife.co.zm Altus Capital Limited Plot 74 Independence Avenue Mpile House Lusaka P.O. Box 35352

107 Tel: +260 (211) 253566 Fax: +260 (211 253112 E-mail: capital@altus.co.zm African Life Financial Services Limited Independence Avenue 74 Independence Avenue, P. O. Box 51331, Lusaka Tel: +260) 211 254841 Fax: (+260) 211 253112 E-mail: geoff@aflife.co.zm ABSA Bank Zambia Plc Elunda Office Park Plot 4643 / 4644 Addis Ababa round about, Rhodes Park Lusaka Private Bag E308 Tel: + (260) (211) 366150 / 169 Fax: + (260) (211) 225553 Email: Mwape.Mondoloka@absa.africa Website: www.absa.co.zm Citibank Zambia Limited Citibank House Stand No. 4646 Addis Ababa Roundabout Lusaka P. O. Box 30037 Tel: +260 (211) 444400; 0971 025 133 Fax: +260 (211) 226064 Email: victor.zimba@citi.com Website: www.citigroup.com Finance Securities Limited Plot No. 2110/2111 Sepele Road Opp. Finance House Cairo Road Lusaka. Cell: +260977638583 Skype ID: joel.mbulo1 First National Bank Zambia Limited Plot No. 22768, Corner Great East and Thabo Mbeki road, P.O. BOX 36187, Lusaka Tel (Gen): +260 211 366800 | Direct: +260 211 36 9639 | Cell: +260 966 116 273 and +260 978 017 761 E-mail: haggai.chipungu@fnb.co.za Web: www.fnb.co.za

108 Investrust Bank Plc Ody’s Park, Great East Road P.O. Box 19028/29 Lusaka Tel: (0211) 238733

5 Website: www.investrustbank.co.zm Kukula Capital Limited 32A Foxdale Forest Club House Off Zambezi Road, Roma, Lusaka Tel: +260 211 295792 Email: info@kukulacapital.com Laurence Paul Investment Services Limited 5 th Floor, Design House Dar es Salaam Place (off Cairo Road) P O Box 35008 Lusaka Tel: (0211) 220302/3 Fax: (0211) 220454 E-mail: info@laurencepaul.com Website: www.laurencepaul.com Longhorn Associates Limited Office Park |Plot 1146/1, Lagos Road Rhodes Park, P. O. Box 50655 Lusaka +260 211 252540 |+260 973 452635 Email: marlon@longhorn -associates.com LinkedIn & Facebook: Longhorn Associates Website: www.longhorn -associates.com Prudential Life Assurance Zambia Limited Prudential House Plot 32256 Thabo Mbeki Lusaka P.O Box 31357 Tel: +260 211 222233/4 Website: www.prudential.co.zm Prudential Pension Management Zambia Limited Prudential House Plot 32256 Thabo Mbeki Lusaka P.O Box 31357 Tel: +260 211 222233/4 Website: www.prudentialpensions.co.zm

109 Stanbic Bank Zambia Limited Stanbic House Head Office Plot 2375, Addis Ababa Drive Lusaka P. O. Box 31955 Tel: +260 (211) 370000 – 18 Fax: +260 (211 258439 Website: www.stanbicbank.co.zm Standard Chartered Bank Zambia Plc Head Office Stand No. 4642 Cnr of Mwaimwena Road and Addis Ababa Drive P O Box 31934 Lusaka Tel: (0211) 422198 -99 Fax: (0211) 222092/225337 Standard Chartered Bank Zambia Plc Phone: +260 211 422203 Mobile: + 260 977 767703 E-mail: Dorothy.Moono@sc.com Stockbrokers Zambia Limited Mr. Jack Kanyanga Managing Director 32 Lubu Road LUSAKA Tel: (+260 211) 232456 +26 0977/ 966 853315 E-mail: : jkanyanga@sbz.com.zm Website: www.sbz.com.zm Zambia National Commercial Bank Plc ZANACO Head Office Plot 2118/2119 SapeleRoad/Cairo Road P.O. Box 33611 LUSAKA http://www.zanaco.co.zm/ Investment Advisors’ Contact Details Charles Sichangwa C/o Wits Limited 4 th Floor, Godfrey House, Kabelenga Road Lusaka Tel: +260 (211) 226441/5 Fax: +260 (211) 227116 Email: wits@zamnet.zm

110 deVere and Partners Investment Services Zambia Limited Plot 284 Cnr Joseph Mwilwa Road and Great East Road Rhodes Park Lusaka Tel: +260 211 295999 Fax: 260 211 257114 Email: deVere@devere-group.com Website: www.devere-group.com Enock Bwalya Plot 22956 PHI Chainama Lusaka Mobile +260977807793 | +27605455934|+260950952753 Email: enock.bwalya@africanheights.com|enock.bwalya@yahoo.com Skype:bwalya70 www.africanheights.com Errol Molver Plot No. 12C Off Kabulonga Road Lusaka Riscura Zambia Limited Figtree house Plot No. 1 Warthog Road, Kabulonga Lusaka P.O. Box 320181, Lusaka Tel: +260 (211) 262 773 Fax: +260 (211) 262 773 Email: Zambia@riscura.com Website: www.riscura.com Simon Kalunga Plot No. 1625 Ibex Hill Lusaka Vunani Asset Management Limited Plot 20 Mpulungu Road, Olympia, Lusaka Self Regulatory Organisations Capital Markets Association of Zambia Latitude 15, Leopard Hill Road, Kabulonga P. O Box 51583 Lusaka Email: Info@cmaz.co.zm

111 Listed Companies’ contact details African Explosives Limited (AEL) Zambia Plc Plot 1168/M Kitwe-Mufulira Road P.O. Box 40092 Mufulira Tel: +260 (966) 990945-9 Fax: +260 (212) 412749z Website: www.ael.co.za Listed on 23rdOctober, 2006 Airtel (formerly Celtel and Zain) Zambia Plc Stand 2375 Addis Ababa drive Lusaka Tel: +260 (977) 915000 Website: www.Africa.airtel.com/zambia Listed on 11th June, 2008 British American Tobacco (BAT) Zambia Plc Plot # PH1 IND 54 & 53 LS MFEZ, Chifwema Road P.O. Box 30162 Lusaka Tel: +260968 678 814/ 787 / 671 E-mail: batzam@bat.com Website: www.bat.com Listed on 15th December, 1996 Cavmont Capital Holdings Zambia Plc Unit C, Counting House Square (behind Arcades Shopping Centre) Thabo Mbeki Road P O Box 32322 Lusaka Tel: (0211) 257772/256055/256064 Fax: (0211) 256074 E-mail: contact@cavmont.com.zm Website: www.cavmont.com.zm Listed on 13th September, 2006 Copperbelt Energy Corporation Plc 23rd Avenue, Nkana East P.O. Box 20819 Kitwe Tel: +260 (212) 244000/244281 Fax: +260 (212) 223445/244040 E-mail: info@cec.com.zm Website: www.copperbeltenergy.com Listed on 21st January, 2008

112 First Quantum Minerals Limited C/o Choice Corporate Services Stand 3509/No. 7 Matandani Close, Rhodespark Lusaka Zambia Depository Receipts listed in July 2011 Investrust Bank Plc Investrust House Plot 4527/8 Freedom Way Lusaka P O Box 32344 Tel: (0211) 238733

5 E -mail: investrust@investrustbank.co.zm Listed on 21st June, 2007 Lafarge Cement Plc Farm No. 1880 Kafue Road Chilanga P.O. Box 30162 Tel: +260 (211) 367400/600 Fax: +260(211) 278134 E-mail: cement.enquiries@lafarge -zm.lafarge.com Website: www.lafarge.com Listed on 22nd May, 1995 Madison Financial Services Plc Plot 316 Independence Avenue P.O.Box 37013 Lusaka Tel:378700

5 Email: info@madison.co.zm Website: www.madisonshares.com Listed on 1st September 2014 Metal Fabricators of Zambia (ZAMEFA) Plc Plot 1400 Cha Road Luanshya P.O. Box 90295 Tel: +260 (212) 510599 Fax: +260 (212) 229003/4 Website: www.pdic.com Listed on 9th September, 2004 National Breweries Plc Plot No. 1609/10, Sheki Sheki Road P.O. Box 35135 Lusaka Tel: +260 962 249 210

113 Fax: +260 (211) 246326 Website: www.ab -inbev.com Listed on 16th March, 1998 Pamodzi Hotels Plc Pamodzi Hotel Complex Plot 463, Church Road P.O. Box 35450 Lusaka Tel: +260 (211) 254455/250995 Fax: +260 (211) 254005 E–mail: pamodzi.lusaka@tajhotels.com Website: www.tajhotels.com Listed on December 21st, 2001 Puma Energy Plc (formerly BP Zambia) Head Office Stand No. 1710, Mungwi Road Lusaka P.O. Box 31999 Tel: +260 (211) 376100 Fax: +260 (211) 376149 E–mail: zambia@pumaenergy.com Website: www.pumaenergy.com Listed on 18thJuly, 2002 Real Estate Investments Zambia Plc (formerly Farmers House) Farmers House, Central Park Cairo Road Lusaka P.O. Box 30012 Tel: +260 (211) 227684 -89 Fax: +260 (211) 222906 E-mail: info@reiz.co.zm Website: www.reiz.co.zm Listed on 27th September, 1997 Shoprite Holdings Plc Plot 19255 Cnr, Great East and Manchinchi Roads Manda Hill Centre Tel: +260 (211) 251155 Website: www.shopriteholdings.co.za Listed on 19th February, 2003 Standard Chartered Bank Zambia Plc Head Office Stand No. 4642 Cnr of Mwaimwena Road and Addis Ababa Drive P O Box 31934

114 Lusaka Tel: (0211) 422198 -99 Fax: (0211) 222092/225337 E-mail: customer.first@zm.standardchartered.com Website: www.standardchartered.com/zm Listed on 30th November, 1998 Zambeef Products Plc Plot 4970 Manda Road Industrial Area P/Bag 17, Woodlands Lusaka Tel: +260 (211) 369000 Fax: +260 (211) 369050 E-mail: info@zambeef.co.zm Website: www.zambeefplc.com Listed on 5th April 2005 Zambia Bata Shoe Company Plc Stand 6437, Mukwa Road Heavy Industrial Area P.O. Box 30479 Lusaka Tel: +260 (211) 244397/242328 Fax: +260 (211) 244254 E-mail: batashoe@zamnet.zm Website: www.bata.co.zm Listed on 31st March, 2009 Zambia Forestry and Forest Industries Corporation Plc HEAD OFFICE P.O Box 71566, Dola Hill Ndola Tel: +260 212 671482 Fax: +260 212 616030 Email: info@zaffico.co.zm Listed on 12th February 2020 Zambian Breweries Plc Mungwi Road, Plot 6438 Heavy Industrial Area P.O. Box 30237 Lusaka Tel: +260 (211) 246555, +260 962 249200 Fax: +260 (211) 242124 E-mail: zambrew@zambrew.com.zm Website: www.ab -inbev.com Listed on 9th June, 1997 Zambia Reinsurance Plc Plot 187C Namambozi Road

115 Fairview Lusaka Postnet Box 658 P/Bab E891 Tel: +260 (211) 221159, +260 971 695149 Email: primare@prima -re.co.zm Website: www.prima -re.com Listed on 21st December, 2004 Zambia National Commercial Bank Plc Head Office Building Cairo Road -South End P O Box 33611 Lusaka Tel: + 260 (211) 228979/ 221355/ 221380/ 221404 Fax: + 260 (211) 223084 E-mail: customerservice@zanaco.co.zm Website: www.zanaco.co.zm Listed on 27thNovember, 2008 Zambia Sugar Plc Nakambala Sugar Estate Livingstone Road P O Box 670240 Mazabuka Tel: +260 (213) 231103/231106 Fax: +260(213) 230385 E-mail: administrator@zamsugar.zm Website: www.illovosugar.co.za Listed on 28th August, 1996 ZCCM Investment Holdings Plc ZCCM -IH Office Park Stand No. 16806, Alick Nkhata Road Mass Media Complex Area Lusaka P O Box 30048 Tel: +260(211) 220654/221023 Fax: +260 (211) 220449/221057 E-mail: corporate@zccm-ih.com.zm Website: www.zccm -ih.com.zm Listed on 24th January, 1996 Quoted Companies’ Contact Details Absa Bank Zambia Plc Elunda Office Park Plot 4643 / 4644 Addis Ababa round about, Rhodes Park Lusaka

116 Private Bag E308 Tel: + (260) (211) 366150 / 169 Fax: + (260) (211) 225553 Quoted on 9th March, 2005 Chambishi Metals Plc Sub –division L and M of Lot No. 10/M Kitwe –Chingola Road Chambishi P.O. Box 21151 (Kitwe) Tel: +260 (212) 744006/7 Fax: +260 (212) 744035 E-mail: info@chambishi.com.zm Quoted on 25th January, 2000 Chibuluma Mines Plc Off South Downs Airport Road Lufwanyama P.O. Box 260499 Tel: +260 (212) 749 – 333/777/110 Fax: +260 (212) 749799/749299 E-mail: bsinkala@chib.com.zm Website: www.metorexgroup.com Quoted on 22nd December, 1999 Copperbelt Energy Corporation Africa Plc 2 nd floor Green City Plot 2374, Kelvin Siwale Road, P.O Box 320125 Luska Quoted in 2017 EIZ Properties Plc CL/7 Brentwood drive Longacres Lusaka P.O. Box 51084 (Lusaka) Tel: +260 (211)255161/256205 E-mail: eiz@coppernet.zm Quoted on 9th April 2015 Ikulileni Investments Plc Building 3, Acacia Park Stand 22768. Thabo Mbeki Road P.O. Box 35464 (Lusaka) Tel: +260 (211)370140

5 Fax: +260 (211) 370018 -20 Website: www.stanbic.co.zm Quoted on 18th April, 2015 Kansanshi Mining Plc Mine Site

117 Solwezi P.O. Box 110835 Tel: +260 (212) 658000 Fax: +260 (212) 658300 E-mail: Sean.whittome@fqml.com Website: www.first-quantum.com/our-business/operating-mines/kansanshi Quoted on 29th June, 1999 (as Cyprus Amax Kansanshi Plc) Konkola Copper Mines Plc Stand M/1408 Fern Avenue Chingola P/Bag KCM (c) 2000 Tel: +260 (211) 350604 E-mail: corporate.communications@kcm.co.zm Website: www.kcm.co.zm Lusaka Securities Exchange Plc See address information under Securities Exchanges above Mopani Copper Mines Plc Corporate Office Central Street Nkhana West Kitwe P.O. Box 22000 Tel: +260 (212) 247012/247847 Fax: +260 (212) 247445 E-mail: mopani@mopani.com.zm Website: www.mopani-copper-mines Professional Insurance Corporation Zambia Plc Finsbury Park, Kabwe Roundabout P.O. Box 34264 Lusaka Tel: +260 (211) 366703 E-mail: customerservice@picz.co.zm Website: www.picz.co.zm Quoted on 24th September 2014 Veritas General Insurance Plc Plot 6/60 Kapingila House Kabulonga Road, Kabulonga Lusaka P. O. Box 31965, Lusaka Tel: + (260) (955) 359 873 Fax: + (260) (211)266366 Email: veritas@veritasgeneral.com Quoted on 19th February, 2015 Details of Companies with Listed Debt Securities

118 African Banking Corporation Limited (Trading as Atlas Mara Bank Zambia Ltd) See information on Dealers above. Bayport Financial Services - Debt securities listed on 24th April 2014 Plot 68 Independence Avenue Lusaka P.O. Box 33819 Tel: +260 (211) 257243 Fax: +260 (211) 257432 E-mail: jchola@bayportfinance.com Website: www.bayportfinance.com Focus Financial Services Limited - Debt securities listed on 24th April 2014 1 st floor, Building 3 Acacia Park Thabo Mbeki Road Lusaka P. O. Box 345536 Tel: +260 (211) 291310-14 Fax: +260 (211) 291311 Website: www.focus.co.zm Izwe Loans Zambia Limited - Debt securities listed on 15th July 2013 and 1st August 2013 Ground Floor, South Wing Lubuto House, Lubuto Road Rhodes Park P. O .Box 35087 Lusaka Tel: +260 (211) 235273 Email: info@izwezambia.com Website: www.izwezambia.com Madison Finance Company Limited - Debt securities listed on 1st September, 2014 Madison House Plot 318, Independence Avenue Lusaka P. O. Box 34366 Tel: +260 (211)252248/49 Email: customerservice@mfinance.co.zm Website: www.mfinance.co.zm Real Estate Investments Zambia Plc - Debt securities listed on 12th November 2010 (formerly Farmers House) Farmers House, Central Park Cairo Road Lusaka P.O. Box 30012 Tel: +260 (211) 227684-89 Fax: +260 (211) 222906 E-mail: robin.miller@zamsaf.co.zm Website: www.reiz.co.zm

119 Stanbic Bank Zambia Limited Limited - Debt securities listed on 31st October, 2014 See information on Dealers above. Ulendo Road Infrastructure Road Programme (RINP) - Debt securities listed on 11th December, 2015 2nd Floor, Pangaea Office Park Stand No. 2374 Great East Road, Lusaka P.O. Box 34536 (Lusaka) Tel:+260 (211)291310-14 Fax:+260 (211) 291312 Website: www.focus.co.zm Zambian Home Loans Limited Plot 35370 Garden Plaza, Thabo Mbeki Road Lusaka Post Net Box 301 Tel: +260 211 254325 Email: info@zambiahomeloans.co.zm