THE Zimbabwe Stock Exchange (ZSE) has shortlisted four companies for the supply and installation of the Automated Trading System (ATS) as the bourse pushes to automate the trading of shares.
Automation will replace the current manual system where brokers place orders on bids on a board during trading sessions on the floor for allotment to be done.
According to the ZSE monthly report (ATS Watch), ZSE chief executive officer Alban Chirume said the four companies which have expressed interest in the supply and installation of the ATS are Chartered Systems Integration (Consortium), National Stock Exchange of India, New York Stock Exchange Euronext and Infotech Middle East.
Chirume said the tender notice and request for expression of interest for the supply and installation of the ATS was issued on September 18, 2013 and closed on September 27, 2013.
“Vendors who were interested in the tender were required to submit their proposals by October 31, 2013. The ZSE expects to have selected a vendor by the close of November 2013,” Chirume said.
The Securities and Exchange Act (cap 24.25) is a requirement that registered securities exchanges and licensed persons employ automated electronic means when dealing in securities.
The ATS is expected to go live within the first quarter of 2014.
Chirume said the automation of the bourse has been on the agenda of ZSE since 2000, with earlier plans having been stalled due to funding constraints.
“The automation of the bourse stands out as a very challenging and interesting project as it opens up various possibilities that are already characteristic of more developed markets,” Chirume said.
“The current open outcry system does not enable real time response and visibility of the trades. Automation will result in a quantum change in accessibility, availability, transparency and accuracy of trades.”
He said automation of the trading system has benefits and potential risks which were associated with these systems which included technical faults and hacking.
But the risk management strategies would assume greater importance on the part of the ZSE.
In September, ZSE appointed Central and Settlement Co (CDSM) of Mauritius as the consultant for the automated trading system.
CDSM operates the securities central depository in Mauritius and also provides technology services to the Stock Exchange of Mauritius. The consultant is expected to review business processes of the ZSE, prepare a request for proposals, advise the bourse on the process of vendor selection and prepare the system for implementation.
ZSE projects that automation will double annual turnover to around $1 billion from $450 million recorded in 2012.
Automation will run together with the central securities depository to help in the settling of transaction.
Chengetedzai Depository Company was in 2010 awarded a tender to run the country’s first securities depository system and is working on the system to go live.