The Victoria Falls is one of the most iconic natural geographic phenomena in the world – the world’s widest sheet of falling water attracts hundreds of thousands of visitors from across the globe to Zimbabwe. The government of Zimbabwe has decided to ride on the falls’ popularity and untainted reputation by launching the Victoria Falls Stock Exchange (VFSE) through Statutory Instrument 196 of 2020. Statutory Instrument 196 of 2020 is cited as Exchange Control (Special Provisions for Securities Listed on Victoria Falls Stock Exchange) Regulations, 2020.


Brief Outline

Section 2
This section states that any securities listed on the VFSE shall be tradable and settled solely in United States or a convertible currency. This offers some certainty in so far as currency risk is concerned. It is important to note that convertible currency is not defined in the regulations. As such it is not clear whether the local currency will also be accepted as a convertible currency for settlement purposes.


Section 3
In Section 3, the regulations set out the requirements for resident companies that wish to  list on the VFSE. If a company is a Zimbabwean resident AND is listed on the Zimbabwe Stock Exchange they may list up to 20% of its capital listed on the Zimbabwe Stock Exchange provided that such capital is raised from offshore accounts or free funds. Some key definitions in the regulations are key in understanding when Section 3 applies.

Resident – defined as a company that is incorporated, registered or domiciled in or outside Zimbabwe

Free Funds – shall have the same meaning as in Statutory Instrument 212 of 2019. In SI 212 of 2019, free funds are defined as


Section 4
Non-resident companies may list on the VFSE provided that any capital raised by the company are from an offshore source or free funds. There is no capital investment cap for non-resident companies unless, as per section 4(ii), the non-resident company had delisted from the ZSE in the five years preceding its listing on the VFSE. In this instance, the maximum percentage of capital that can be reinvested is 20% of the capital raised on the VFSE.


Section 5
If a Zimbabwean resident company is not listed on the ZSE, they can still apply for listing on the VFSE if any capital they raise on the VFSE is from an offshore source or free funds and at least 20% of such capital shall be reinvested or employed in Zimbabwe no later than five (5) years after the capital was raised.


Section 7
Any capital raised by a company listed on the VFSE can be held in an approved local or offshore account with an internationally recognised banking institution. In terms of this section, there is no further clarity on which institution shall approve the account.


Section 8
This section stipulates that all clearing and settlement of transactions on the VFSE shall be done by the VFSE either locally or offshore in terms of Clearing and Settlement Rules to be approved by the Securities and Exchange Commission in consultation with the Reserve Bank of Zimbabwe. The extent of consultation with the RBZ is not clarified in the regulations though the use of “consultation” instead of “approval” is theoretically indicative of the RBZ playing more of a supervisory role in settlement of transactions.