History

Establishment of the Securities and Exchange Commission and the Lusaka Stock Exchange

The 1972 Securities Act was revised to facilitate the establishment of the Securities and Exchange Commission. Section 3 of the Securities Act established the Securities and Exchange Commission [SEC], a statutory body, as the regulator of the Zambian securities and capital markets, as part of the Zambian financial markets. Among, the institutions regulated by SEC are Lusaka Securities Exchange (formerly Lusaka Stock Exchange), dealers and investment advisers. SEC licenses the above categories as well as registers public offerings and authorizes collective investments such as unit trusts. SEC has the important statutory function to develop capital markets in Zambia and support the use thereof by Zambians and others.

The Lusaka Securities Exchange (LuSE), is the principal stock exchange in Zambia, is licensed under section 7 of the Securities Act. The Lusaka Securities Exchange was established with preparatory technical assistance from the International Finance Corporation (IFC) and the World Bank in 1993 at a time when the government was shifting from government controlled business focus through the parastatal system to a private sector driven economy. It was one of the tools by which government would achieve some of its economic reform programs of empowerment and wealth creation among Zambians. In the first two years of operations, the LuSE and Securities and Exchange Commission (SEC) were funded by the UNDP and Government of Zambia as a project on Financial and Capital Market Development in Zambia under the Multi Component Private Sector Development program. The LuSE enjoyed government grants to support operation needs until 2008.

The LuSE has been a successful vehicle through which several investors have created wealth for themselves and issuers have raised funds, attained liquidity and market valuation. The global objectives of setting up the Lusaka Securities Exchange were:

• – Empower and create wealth for Zambians through wide ownership of shares
• – Encourage local and foreign portfolio investment
• – Provide a market place for the secondary trading of securities
• – Facilitate the divestiture of Government interest in parastatals
• – Create a culture of good corporate governance and good corporate citizenship
• – Facilitate a mechanism for the raising of relatively cheaper long-term capital for the private sector.