Wednesday, October 28, 2020

Is it legal to trade Forex in Zimbabwe?

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Emmanuel Gbikpo
Emmanuel Gbikpo is a Ghanaian journalist who specializes in Tech reporting.
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Overview

Apart from being the largest and most active financial market in the world, the Forex market is considered as one of the most valuable vehicles of international commerce.

Zimbabwe is notorious for ongoing economic upheavals, both past and present, but this should not discourage Zimbabwean traders as they remain the link between local and international communities.

The Zimbabwean currency has seen a substantial number of demonetizing phases which inevitably led to its final suspension in 2009 by the Zimbabwean government.

In its place, a multiple currency framework was put in place and allowed for the acceptance of certain currencies in which purchase, and trade could commence. These currencies include:

  • US Dollar
  • South African Rand
  • Indian Rupee
  • Japanese Yen
  • Euro
  • British Sterling Pound
  • Chinese Yuan
  • Botswana Pula, and
  • Australian Dollar.

Forex trading in Zimbabwe

Trading holds the opportunity for great gains, but it also has various and numerous risks in trading itself. This goes along with the act entrusting funds to brokers who are tasked with the responsibility of keeping client funds safe and only using it for trading activities.

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Trading in Zimbabwe is a legal activity as is indicated in the Securities Act – Act 17/2004. However, since its draft in 2004, it makes extraordinary little mention of Forex Trading.

The act stipulates that pertain to the Zimbabwean Capital Market which is subjected to the oversight of the Securities and Exchange Commission, or SECZ, the Zimbabwean Stock Exchange and the Financial Securities Exchange.

You might like : Forex Trading Scams in Africa

The Zimbabwean Stock Exchange, or ZSE has always been the backbone of the Zimbabwean Capital Market. In 2015, manual trading was replaced by an automated system, but this only catered for stockbrokers and features mining and industrial indices.

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In 2016, the Financial Securities Exchange, or FINSEC, received its first ATP license with the purpose of providing an electric platform to formalise marginalised market segments. It also combined all alternative trading activities on one single marketplace.

Electronic trading was facilitated over a wide variety of securities and enhanced financial inclusion which enabled a variety of investors in obtaining access to the alternative capital market investment options, which are not offered by conventional exchanges.

The Securities Act does not only serve the purpose of protecting traders, but it also offers a legal framework for legal Forex trading, and the trade in other financial instruments, provided that trading activities are conducted through a regulated, authorized broker.

Final Thoughts

As with numerous other African countries, there are legal frameworks in place in Zimbabwe to ensure that traders are protected, to prevent an increase in unregulated trading activities, and to try and eliminate illegal Forex trading.

These frameworks make adequate provision for trading activities with the exception that they are done through a broker which has the required licences, regulation, and authorization in place.

There are numerous reputable and well-regulated brokers who cater for, and welcome, Zimbabwean traders and in addition, offer comprehensive trading solutions and services along with competitive trading conditions which cater for both beginners and experts.

Open a Free Trading Account Today

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