eBusiness Weekly
Tawanda Musarurwa
Escrow Systems has said it is looking forward to bring turnaround trading on the online and mobile shares trading platform C-Trade.
Turnaround trading basically refers to the purchase and sale of a security or securities on the same day.
The Securities and Exchange Commission of Zimbabwe (SECZ) presently requires trades to be settled within a three-business day time period, also known as T+3 (transaction +3 days). That is to say, when one buys stocks, the brokerage firm must receive payment no later than three business days after the trade is executed.
Said Escrow Systems MD Simbarashe Machanzi:
“Turnaround trading is an exciting feature that we are looking to introduce into the market, where you can re-trade your merged value of securities on the day that they were made without waiting for state of entries.
“As you know a state of entry takes T+3 meaning that you would have otherwise received your proxies on Day 3. But we are saying with the matching notification from the exchange we can allow you to buy more shares as you are waiting for T+3.”
Escrow Systems — a unit of the Escrow Group — is SECZ’s technical partner on the C-Trade platform.
C-Trade is an end to end innovation that harnesses and promotes participation of every type of investor on the Zimbabwean stock markets, through mobile and Internet-based platforms while linking all capital markets participation.
Last year, Chengetedzai Depository Company, which maintains the electronic registration of shares on the Zimbabwean Stock Exchange (ZSE) said it was mulling introducing turnaround trading to appeal to a different profile of investors.
The central securities depository (CSD) shortened the settlement cycle to T+3 from the T+7 which existed before May 2017.
The CSD said it had received inquiries on securities lending and borrowing. Notably securities lending and borrowing are key to managing the risks around turnaround trading.
Meanwhile, Escow Systems is also looking to enhance the C-Trade platform by adding a facilty that will allow for Zimbabweans to be able to trade shares on regional stock markets.
“Cross border trading is another exciting feature as well. We are now going into cross border trading where will give you the ability to trade and view securities in other countries. Through C-Trade, one will be able to trade shares that are in Kenya, for example,” said Machanzi.
