Should the Securities Act, Chapter 354 of the laws of Zambia be amended to conform with the new developments internationally in order to be comprehensive, capture and reflect international best practice?

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Mulendema, Chintu Youngson
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Capital Markets are a barometer of a healthy economy. In Zambia, over the past two years the capital market has began to grow in terms of market capitalization and a lot of interest has been shown through purchase of portfolio investments by foreign investors, despite the worldwide financial crisis. It is said that the share prices, unlike those of other assets, are volatile, i.e. they can either rise or fall. Therefore, they depend on the confidence the investor place on listed company's due to their conduct, and how that particular industry is performing relative to the Country's economy. Depending on the company's performance and respect for corporate governance, and its stewardship, this particular investment by investors poses significant risks because all the gains in the share price could suddenly be wiped off to zero resulting in the investors losing out all their fortunes. A case in point is the collapse of Enron in the USA and Parmalat in Italy. Because of this uncertainty and the unbearable effect such a calamity would have on the economy and the investors, since the movement in the price of shares on the capital market is dependent on the conduct of the market players, it is imperative therefore, that the securities market is regulated effectively and efficiently in order to safeguard the interests of the investors. Internationally, an organization called the International Organization for Securities Committee, based in USA, Washington D.C, a leading international grouping of securities market regulators, was formed to specifically provide a list of international standards on the management of securities in the capital market. Bearing this in mind and since the establishment of SEC was established over 14 years ago, it is prudent to ascertain whether the Securities Act, Chapter 354 of the Laws of Zambia should be amended to conform with new developments internationally in order to be comprehensive, capture, and reflect international best practices. This paper is divided into four chapters. Chapter one deals with the introduction and gives background information on the research subject. Chapter two will look into the IOSCO principles. Chapter three reviews the Securities Act and chapter four consists of the conclusions and recommendations based on the findings.
Securities-Zambia , Capital Market , Deeds of Trust