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EASY STEPS FOR ZAMBIANS ABROAD AND FOREIGN INVESTORS TO INVEST ON THE LuSE

The Lusaka Stock Exchange (LuSE) has received numerous queries from investors abroad on the operation of its stock market. In response, the LuSE has now made arrangements for Zambians abroad and foreign investors to easily buy and sell shares on its market. Please follow the notes and guidelines below.

Step 1: OPEN A SHARE ACCOUNT WITH A LuSE STOCK BROKER
Select a broker of your choice from the list at the back and fill in an e-mail application form to open your share account. Upon receipt of your e-mail application form, the LuSE Broker should send you a note to confirm that your share account has been opened at the Central Share Depository [CSD] of the LuSE.

The Broker should also advise you of your share account number.

A copy of your application form will be sent to the LuSE by your broker for verification and recording.

Step 2: SEND MONEY FROM YOUR BANK TO YOUR BROKER IN ZAMBIA TO BUY SHARES ON THE LuSE

Zambians abroad and foreign investors can easily send money to their appointed broker with instructions to purchase shares on the LuSE. Call your broker for their bank account details.

CUSTODIAN BANKS – AN ALTERNATIVE OPTION FOR INVESTORS ABROAD

The LuSE has two custodian banks, namely Barclays Bank Zambia Ltd and Stanbic Zambia Ltd. Custodian banks provide safe custody of funds and securities in Zambia for both domestic and investors abroad.

The custodian bank receives instructions from the client [investor abroad] and executes these in the domestic market. For a buying transaction, the custodian bank will receive the funds from the investor abroad.

The custodian will then monitor the entire transaction, and release funds when the buy order has successfully been traded, cleared and settled on the LuSE. After settlement, the custodian may [if the client requests] proceed to hold the shares in a custodian sub-account in the CSD of the LuSE, on behalf of the investor abroad. The contact details for the LuSE custodians are shown at the back.

Step 3: OBTAIN A CONTRACT NOTE FROM YOUR BROKER – This is important!

Once your order to buy or sell has been traded (matched) at the stock exchange, the LuSE produces a trade confirmation report to your broker. Your broker is then required, under the Securities Act, to issue you a Contract Note within 24 hours. The contract note is the legal confirmation of the transaction. You should therefore receive an e-mail contract note from your broker to confirm that your buy or sell order has been matched on the LuSE and that the transaction will be irrevocably settled with finality 3 days after the trade (T+3].

Contract notes should be filed and kept under the safe custody, as they are legal proof of the transaction.

SETTLEMENT
3 days after the trade, termed T+3, [excluding weekends and holidays], the matched trades are settled by the LuSE Central Share Depository. This settlement involves two simultaneous steps – the movement of money [payment] from the buyer to the seller and the movement of shares [delivery] from the seller to the buyer. This is termed Delivery versus Payment.

Settlement is run everyday on the LuSE at 0900 hours and completed by 1100 hours, the brokers [seller’s side] receive money for all shares sold whilst the buyers receive the shares purchased as book entry credits to their share accounts in the CSD. Brokers are therefore in a position to pass on the money from the sale proceeds, to their clients the same day on T+3 when settlement is run.

TO SELL SHARES
The procedure for selling shares is similar to that for buying shares as described above.

To sell shares you should send an instruction to your broker or custodian bank preferably by fax or by e-mail.

LATEST INFORMATION ON SHARE PRICES – See LuSE website at: http://www.luse.co.zm

The LuSE website gives indicative share prices in Kwacha, US Dollars [or cents] British pounds [or pence] and South African rands [or cents] to assist investors abroad in their investment decisions.

Latest share prices can be obtained by contacting your broker or the LuSE by phone or e-mail.

DIVIDENDS AND OTHER CORPORATED ACTIONS
Quarterly and final dividends, when declared, will be mailed to the address declared by the investor on the client account form.

It is important therefore that the address declared to the LuSE on the share account application form is the same as the address for receipt of dividend payments. All other correspondence [annual reports, AGM notices, EGMs, etc] will be sent to this address.

SUBSCRIPTION TO THE LuSE STOCK NEWS
Investors abroad can subscribe to the LuSE Daily Stock News, Weekly Stock News or the Monthly Newsletter. Details on subscription are available from luse@zamnet.zm.

INVESTOR PROTECTION AND MARKET REGULATION
The LuSE market is designed to operate to current best international standards.

The LuSE Listing Rules have been harmonised with those of the Johannesburg Stock Exchange [JSE]. The Zambian securities market is regulated by the Securities & Exchange Commission [SEC Zambia] under the Securities Act, Chapter 354 of the Laws of Zambia.

The Securities Act is modelled on modern securities legislation as found in the developed economies, and seeks to provide adequate investor protection and the maintenance of a market that is fair, orderly, efficient and transparent.

All players in the Zambian securities market [brokers, broking firms, and even the LuSE] are licensed by the SEC Zambia.

If investors have any complaint or concern, they should contact the Director of Licensing at the SEC Zambia on e-mail: sec@zamnet.zm or telephone number 260 1 227012/226911 or fax number 260 1 225443. The SEC Zambia will investigate the matter to give appropriate redress and remedial action.

First issued on 18 July 2000

For further details, contact the LuSE CSD Manager on e-mail: info@luse.co.zm or Telephone number 260 1 228594/228391 or fax number 260 1 225969