What is ATS?
ATS (“Automated Trading System”) is an electronic platform offered by the ZSE for the purchase and sale of securities (shares, bonds, debentures and so on). The ATS has an order matching engine and replaces the manual trading of shares that we have all been used to in Zimbabwe.
How does the ATS work?
ATS electronically matches and executes “buy” and “sell” orders that stockbrokers would have brought into the system, in order for both buying and selling clients to get the best bargains available on the market for their shares. It is different from manual trading in that there is no human intervention in the processes of matching orders.
What are the benefits of the ATS for the ZSE, and for the investing public?
- Transparency in share dealings;
- Speed of execution;
- Convenience: it eliminates human interference and Traders can do business from anywhere without necessarily having to attend “Call-Over” sessions at the ZSE;
- Surveillance: The ZSE and The Securities and Exchange Commission of Zimbabwe can monitor trading activities of stockbrokers for the benefit of the investing public.
Is the manual system of trading that we are all used to not better for this country?
International best practice shows the trend is towards automation of trading. Manual systems by their nature are counter-progressive and may be manipulated at the expense of the investing public. In addition, manual systems are cumbersome and tend to be unattractive to the promotion of inflows of Foreign Direct Investment, which every country needs for development.
Can investors trade directly on the ATS?
Investors will be able to place orders with Stockbrokers as has always been the case. Future developments may allow certain classes of investors to have Broker-sponsored investor terminals which give them access to the system for order placement purposes.
Can investors view trading information real time on the ATS?
Initially the investing public will access trading information through their Stockbrokers. However, future developments may also allow the ZSE to issue “View Only” terminals to investors for the purpose of accessing trading data real time.
So what is the role of the ZSE on the ATS, and will stockbrokers still be necessary in this new trading environment?
All trades will be done via the Stockbrokers, as in the manual system. The only difference is that stockbrokers will trade from terminals installed in their offices, negating the need for the traders to attend Call-over sessions at the ZSE, as was the case with manual “Open Cry” system.
The Zimbabwe Stock Exchange will continue to have a supervisory role over the trading activities of the market and will direct, supervise and monitor activities on a daily basis.
Will I still get a Broker’s Note after trading on ATS?
The ATS is a trading engine and at the end of each day it will issue trading reports to relevant Stockbrokers who will still be responsible for issuing Brokers’ Notes to the various clients depending on their trades for the day.
How reliable is the ATS? Are we not going to have frequent breakdowns of the system?
The CAPIZAR Trading System and the corresponding reports menu, which constitute the ATS is a tried and tested system which has worked well in such markets as Mauritius, Ghana and Pakistan. The ZSE however, in installing the system, has followed internationally accepted best practice for project management and implementation protocols to ensure the system will be as reliable and as user friendly as it can get.
What IT infrastructure do I need to have an investor terminal?
A normal desktop/laptop with standard operating software and reasonably fast internet connectivity will be sufficient. Any additional specifications will be communicated on an individual basis as and when needed.
How user friendly is the ATS and does one need prior experience to operate the trades on ATS?
The ATS runs on the normal internet platform and has been proven during User Acceptance Testing to be quite user friendly, reliable and simple enough to meet requirements of the Zimbabwean market. Investors will not need prior training to benefit from the ATS since they will trade through interface with their respective stockbrokers.
What do I need to do in order to trade shares on the ATS?
Investors will need the following in order to trade on ATS, via their respective stockbrokers:-
- For selling shares one needs to ensure the share certificates have been “de-materialised” by the CSD
- Buying clients must ensure they have deposited sufficient cash to cover trades in a “broker-controlled” account with a settlement bank. Your stockbroker will assist you on how to comply with the above two points
- Each client must ensure they have opened a CSD Customer Account and has been issued with a Customer ID Number with a Custodian of your choice: again your stockbroker will assist you with the process
- You must ensure you have placed your order with your Stockbroker who will be able to transact on your behalf.
Can I buy shares without cash up front?
No. You will need to prefund a “Broker Controlled” Settlement Account with your Custodian before your Stockbroker can accept your buying instruction.
Can I place an order to buy or sell shares from anywhere in the world? Can I be able to link up with my stockbroker from anywhere on ATS?
Your link with the ATS will always be via your Stockbroker. Depending on what systems your stockbroker has in place for placement of orders onto his internal systems, you should technically be able to place orders from anywhere in the world. Technological advancement now allows business to be conducted from anywhere in the world.
Can I carry out a trade outside of the ATS? What are the consequences of trading outside of the ATS if my shares are listed on the ZSE?
Once the ATS goes live, and as long as the shares you want to trade are listed on the Zimbabwe Stock Exchange, it will no longer be possible to trade shares outside of the ATS. Your Stockbroker can advise on the consequences for breach.
Will I still be able to choose which stockbroker to use or one will be allocated to me by the ZSE to trade on this ATS?
As has always been the case, investors will have a choice on which Stockbrokers to use in trading on the ATS. The automation of trading by the Zimbabwe Stock Exchange will not eliminate any investor’s right to choose which Stockbrokers to trade through.
How will my shares and other securities trade on the ATS?
When a client gives an instruction to his/her stockbroking firm to buy or sell a particular stock, the stockbroker will enter the order on his/her terminal. The Automated Trading System automatically matches the orders against each other, resulting in trades. The Automated Trading System records the sale price, quantity, buyer and seller and time of the trade.
What is the trading schedule of the ZSE?
The market schedule for each business day is as follows:
|Market State||Time (Local time)|
|Pre-Opening Session||09h00 to 10h00|
|Continuous Session||10h00 to 12h30|
I have a number of share certificates with less than 100 shares each. Can I still be able to trade them on ATS?
The ATS has two basic markets for trading of shares: The Regular Board, where shares in excess of 100 can be traded, and the Odd Lot Board, where shares of size between 1 and 99 can be traded. Should you have shares of quantity less than 100, your stockbroker will be able to trade them on your behalf on the Odd Lot Board.
In the event that you are in possession of shares more than 100 but with a total that is not a multiple of 100, for example 1 339 shares, your stockbroker will be able to trade your shares as follows:
- 1 300 shares traded normally on the Regular Board, and
- 39 shares traded on the Odd Lot Board
Should you also wish to purchase shares on ATS which are less than 100, again your stockbroker will be able to trade such volume on the Odd Lot Board.