A comparative analysis of the regulation of market manipulation in Zimbabwe

Abstract

Market manipulation is defined as a practice that interferes or attempts to interfere with the free and fair operation of financial markets by creating an artificial, false or misleading appearance with respect to market prices, securities, commodities or financial instruments. Market manipulation practices also include the misuse of material information; dissemination of false or misleading information; a practice which abnormally or artificially affects, or is likely to affect the formation of prices or volumes of financial instruments or securities; dark pools and wash trades. Zimbabwe was regarded as one of the most vibrant and developed financial markets in Southern Africa in the 1980s. However, its anti-market manipulation laws have not been consistently enforced to date. Financial markets are crucial to the economic growth of many countries, including Zimbabwe. Market manipulation is one of the practices that affects and interferes with the operation of financial markets. Accordingly, this research provides that Zimbabwe should design and institutionalize an optimal regulatory system that promotes investor protection and enhances financial market development. This approach could enable the Securities and Exchange Commission of Zimbabwe (SECZ) to effectively combat market manipulation in the Zimbabwean securities and financial markets. In this regard , the research usefully outlines the importance of enacting adequate anti-market manipulation laws in Zimbabwe. Accordingly, the research states that such laws must incorporate other relevant anti-market manipulation enforcement approaches that could be adopted from the South African anti-market abuse laws.