Securities and Exchange (Victoria Falls Stock Exchange Mineral Commodities) Rules, 2024

These rules were made by the Victoria Falls Stock Exchange and approved by the Securities and Exchange Commission under section 65(3) of the Securities and Exchange Act [Chapter 24:25]. They set up a minerals commodity exchange at VFEX whose stated objectives are a regulated platform for trading minerals, transparency, and better price discovery. Trading is in warehouse receipts and in contracts, on an automated trading system.

Eight classes of participant must be licensed by the Commission and registered on the Exchange: warehouse operator, warehouse person, individual commodity dealer, individual general commodity dealer, commodity dealing company, general commodity dealing company, market maker and clearing house. Corporate applicants file constitutive documents, director and key-personnel lists with police clearances, capital adequacy, audited financials, a valid tax clearance and proof of insurance. Individuals must be at least 21, hold at least a diploma in a business or mining related field, complete the Exchange's commodity dealership training and produce police clearance. Registration must be confirmed to the Exchange by 31 December each year; unpaid fees attract interest at SOFR plus 2 per cent, and a further month's default can end the registration.

The rules cover the full market lifecycle: warehouse licensing and standards, issuance, negotiability, replacement and cancellation of warehouse receipts, the warehouse operator's lien, registration and classification of receipts and contracts, order types and qualifiers, tick sizes, floor prices, price spreads (orders outside the spread are rejected by the system), trading halts, official price lists, daily settlement prices, clearing and settlement, mark-to-market and variation margin, additional margin and collateral. Participants holding client money must keep it in a separate trust account, pay it in on the day received or the next trading day, and may only withdraw it for settlement, client refunds, expenses and dealer fees — a wrongful withdrawal is an offence carrying up to a level six fine or a year's imprisonment.

The Second Schedule sets the money. Non-refundable application fees: US$500 each for an individual commodity dealer, individual general commodity dealer and warehouse person; US$350 for a warehouse; US$1 000 for a commodity dealing company or warehouse operator; US$1 200 for a general commodity dealing company or market maker; US$2 000 for a clearing house. Annual fees: US$500 for the three individual categories, US$1 000 for a commodity dealing company, US$1 200 for a general commodity dealing company, market maker or warehouse operator, and US$5 500 for a clearing house. Monthly access fees run US$100 to US$125. Trade cancellation costs US$100, reallocation US$50, and confirmation of securities for deceased estates US$10. All figures exclude VAT.

Trading fees on warehouse receipts through a broker are charged on both buy and sell: 0.25 per cent VFEX fee, 0.40 per cent dealer's commission and 0.10 per cent to the Securities and Exchange Commission. Trading directly through the Exchange is 0.25 per cent VFEX fee, a 0.2 per cent direct access fee and 0.10 per cent to the Commission. Fees on contracts are flat amounts scaled by lot size, from US$10 VFEX, US$16 dealer's commission and US$4 Commission fee for lots of 0 to 5 tonnes, up to US$22, US$35 and US$8.80 for lots above 30 tonnes.

The First Schedule is a tariff of fines and disciplinary steps, generally escalating from a written warning or public censure through fines to suspension, cancellation and deregistration. Notable amounts: US$1 000 for a repeat failure to notify a breach, for failing to notify director or contact changes, for unpaid annual fees, or for failing to keep a trust or business account; US$2 000 for poor record-keeping, for trading during a halt and for publishing market data without approval; US$3 000 for failing to give the Exchange requested information; US$5 000 for refusing to cooperate with the Exchange or for unauthorised disclosure of confidential information; US$5 000 to US$10 000 for submitting false or misleading information; and US$10 000 for trading off the automated system without approval, failing to pay margins, failing to remit interest on margin deposits to clients, or failing to lodge collateral. The rules also carry market-abuse provisions on false trading, manipulation and fraudulently inducing a person to trade.

The rules were gazetted on 23 August 2024 and state no separate commencement date.