FINSEC to launch Derivatives Market*

Financial Securities Exchange (FINSEC), is set to launch the Derivatives Market on the 22nd of June 2022 . 

This will further diversify capital markets products and trading, allowing market players to make more informed investment decisions. 

The launch follows the recent gazetting of Statutory Instrument 70 of 2022 as well as approval of the Derivatives Rules.

The FINSEC Derivatives Market will be available for Stock Futures, Stock Options and Stock Indices. 

The Market is fully automated, complete with direct integration of contract writing, trading, clearing, custody, margin management and settlement facilities to ensure efficiency, security and transparency in the entire process. 

Detailed Derivatives Market Guidelines covering pricing and underlying securities selection criteria are available on the exchange website. 

Pre-launch, FINSEC embarked on a market capacity building exercise through holding masterclasses for market participants as well as potential investors to prepare them for the Derivatives Market. 

Post launch, a six months rigorous pilot window will be opened to allow the participants and investors to get acquainted with the product, hence maximum position limits of ZWL 3 million for institutional investors and ZWL 100 000 for retail investors have been set. 

Beyond the first six months, FINSEC will lift the limits and add more underlying assets (including commodities) to allow a fully-fledged Derivatives Market.

Stock Futures and Stock Options – Underlying securities will be selected based on minimum liquidity and volatility thresholds as determined by the exchange. 

Listed stocks that have so far met this 
criteria are Simbisa Holdings Limited; Econet Wireless Limited; Innscor Limited; Delta Corporation Limited and Ecocash Holdings.

Index Futures – FINSEC will select the most volatile indices on the local markets. The following indices have met the set criteria and will form the underlying for Index Futures; Stock Indices Components M & C Telecoms, Media and Technology Index (MCTMT) Ecocash Holdings; Econet Wireless.