The Capital Markets Tribunal which was formally inaugurated on 20th May, 2020 by Chief Justice of Zambia Justice Irene Mambilima will enhance efficiency in dispute resolutions and settlement that would enable further growth of the sector.
Before the establishment of the specialised tribunal, disputes within and between capital market players had to go through the normal litigation process which is costly and can be time consuming.
Capital markets are key in any economy as they provide an alternative platform for Small and Medium Enterprises (SMEs) and large enterprises to raise capital (funds) for medium and long term financing other than from loans and banks lending facilities.
Capital Markets Tribunal newly appointed Chairperson Chanda Nkoloma Tembo told the Zambian Business Times – ZBT in an exclusive interview that the Capital Market plays an important role in an economy as bridges the gap between would be savers/investors and would be borrowers for the provision of commercial financing for medium and long term investment.
She disclosed that financing is raised by issuing of shares, debentures, stocks, bonds, and other long-term investments aimed at achieving desirable outcomes such as growth, profitability, productivity, competitiveness, efficiency and/or innovation critical for driving both business and economic growth.
She added that while the Capital Market provides opportunities for mobilizing, sourcing and accessing commercial financing for businesses, the market can only function optimally if it is well organized and regulated, and that is were the tribunal will play its critical part.
“Recent experiences from the financial crisis of 2008 show the catastrophic effects of a Capital Market that malfunctions due to poor regulation and poor enforcement. The industry therefore, requires the establishment of effective and robust institutional and supervisory arrangements to assist, firstly, in shaping the functioning of the Capital Market to avoid malfunctions in industry caused by misconduct by market players”.
“Secondly, well organized and regulated capital markets to protects funds of investors whether local, foreign, individual, small, or large from risks in the market,” She said.
Tembo further disclosed that key market players in the Capital Market sector in Zambia include the Lusaka Securities Exchange (LuSE), issuers of stock such as companies listed on the LuSE, the International Finance Corporation (IFC), investors such as Pension funds, institutions and individuals, Capital Market operators such as brokers, investment advisors as well as transfer agents and representatives. All these parties and players will have an efficient dispute resolution mechanism through the tribunal.
The Capital Markets Tribunal in Zambia was established as a quasi-judicial body under the Securities Act, No. 41 of 2016 and formally inaugurated on Wednesday 20th May, 2020 following the swearing in of Tribunal Members by the Chief Justice of Zambia.
The Capital Markets Tribunal is established to be a dedicated, industry-specific and fast-track adjudicative body for resolving and settling disputes in the Capital Market. This provision is meant to deliver a more efficient capital market for Zambia which is key to growth and expansion of the sector.
