The Securities and Exchange Commission
The Securities and Exchange Commission (“the Commission” or “the SEC”) is the regulator of the Capital Markets in Zambia. It was established through Cap 354 of the Laws of Zambia which was repealed and its existence was continued through the Securities Act no. 41 of 2016 (“the Act”).
The Commission’s mandate as prescribed in Section 9 of the Act is to create and promote conditions in the capital markets aimed at ensuring the orderly growth, integrity and development of the capital markets. Central to the SEC’s mandate are the objectives of:
- protecting investors;
- ensuring that markets are fair, efficient, and transparent; and
- reducing systemic risk.
The SEC’s mandate is aligned to the International Organisation for Securities Commissions (“IOSCO”) Objectives and Principles for Securities Regulation (“the Principles”). IOSCO has noted that in order to effectively apply the Principles, “an increasing number of (its) members are now moving away from a rigid rulesbased system of regulation to a system that is more reliant on the supervisor’s discretion and professional judgment through adoption of a risk-based supervisory structure.”
Upon consideration of the benefits and outcomes that are anticipated to be achieved through the application of risk-based supervision in the Zambian capital markets and the legal basis provided by section 9 of the Act, the SEC resolved to adopt risk-based supervision. To this end, the Board of the Securities and Exchange Commission approved the Risk Based Supervision Policy (“SEC RBS Policy”) which outlines the Commission’s approach to supervision of capital markets in Zambia. The key concepts of the SEC RBS Policy are outlined below.