ZAMBIA Law and Practice Contributed by: Joseph Jalasi, Mailesi Undi, Chama Simbeye and Wana Chinyemba, Dentons Eric Silwamba, Jalasi & Linyama Legal Practitioners
The LuSE operates the Central Share Depository, which is the warehouse for records of all instruments traded on the stock exchange. Typical transactions on the LuSE are initial public offerings and listing of debt securities. It is typical for listed debt securities to be registered with the SEC first. Once the debt securities are offered and brought to the open market, there is a formal listing application, after which the securities are listed on the Lusaka Stock Exchange Debt Securi - ties Tier. As with initial public offerings, debt securities are also listed. Debt securities may only be quoted. In other words, the issuer only needs to register the debt securities but does not need to apply to list them on the stock exchange formally, and therefore they merely remain quoted. The listed market is further divided into the main mar - ket and the alternative market. Trading is done only by licensed brokers. There is no property gains tax. However, there is a withholding tax on any declaration of a dividend. There is also no PTT for shares traded as listed shares. This exchange does not apply to quotes, shares or securities. 5.2 Securities Regulation The Securities Act No 41 of 2016 is the general legisla - tion that regulates securities. There are several regula - • Securities (Registration of Securities) Rules; • Securities (Compensation Fund) Regulations; • Securities (Collective Investment Scheme) Rules; • Securities (Accounting and Financial Requirement) Rules; • LuSE Listing Rules; and • the Securities Green Bond Guidelines of 2019. 5.3 Investment Funds Foreign investment funds will be regulated should they be offered to members of the public. A foreign- based investment scheme has to apply to the SEC to be granted authorisation to operate a foreign-based investment fund. The precondition of the SEC is that tions made under the Act, which include: • Securities (Takeover and Merger) Rules; • Securities (Advertisement) Rules;
the scheme must have an agent in Zambia if it is man - aged from a foreign country. The Securities Act pro - hibits any person from entering into any agreement with the view of acquiring, disposing of or subscrib - ing for shares, units or other securities representing an interest in a collective investment scheme or the establishment and operation of a venture capital fund. Any person who structures such a fund with approval from the SEC is committing an offence. Another regu - lator, in addition to the Securities Act, is the Securities Investment Scheme. The SEC allows an application to be made by a foreign-based investment scheme. 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview Zambia has a merger control regime, and the body responsible for this is the CCPC. The Competition Act provides that a merger occurs when an enterprise directly or indirectly acquires or establishes direct or indirect control over the whole or part of the business of another enterprise or when two or more enterprises mutually agree to adopt arrangements for common ownership or control over the whole or part of their respective businesses. Accordingly, a merger may be achieved where: • an enterprise purchases shares or leases assets in, or acquires an interest in, any shares or assets belonging to another enterprise; • an enterprise amalgamates or combines with another enterprise; or • where a joint venture occurs between two or more independent enterprises. The Competition Act provides that a person controls an enterprise if they meet the following change-of- control criteria. The person: • beneficially owns more than 50% of the issued share capital of the enterprise; • is entitled to a majority of the votes that may be cast at a general meeting of the enterprise, or has the ability to control the voting of a majority of those votes, either directly or through a controlled entity of that enterprise;
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