Clearing & Settlement Services
The VFEX depository will implement a prefunding model and a strict delivery versus payment mechanism
within a rolling T+3 settlement cycle. The measures are meant to eliminate principal risk and settlement
risk. The settlement on the VFEX will be DvP model 2 whereby securities are settled in the CSD system on
a gross basis while funds are settled on a multilateral net basis through the Reserve Bank of Zimbabwe.
Trades executed on the VFEX Automated Trading System are automatically fed into the CSD system and
the relevant securities accounts are updated on a real-time basis. Trade confirmation between
participants and the executing stockbrokers occurs immediately after trading on T+0 during the Post close
session. The system provides trade detail, account activity and settlement reports to Participants on trade
date itself (T+0). On trade day, the seller’s Securities Account shows a Pending Out and the traded
securities are not available for further trade. The buyer’s Securities Account shows a Pending In position.
Since there is no turnaround trading on VFEX, securities in the Pending In will not be available for
settlement until after the settlement date. Participants have up to T+0 at 1500hrs to affirm trades that
have been allocated to their clients by stockbrokers. A trade that is rejected by the custodian bank can be
reallocated to another investor or will have to be settled on the account of the executing stockbroker. On
T+1 the funds transfer between the seller’s and buyer’s participants’ takes place at a cut-off time on a net
basis through the participants’ custodian banks and the RBZ. When funds settlement is completed by final
and irrevocable transfer in the books of the central bank, the RBZ will send a confirmation message to the
CSD which then immediately transfers the securities by debiting the seller’s Securities Account and
crediting the buyer’s Securities Account. Such confirmation message is expected on T+3 due to the
settlement cycle of foreign currency transactions. This ensures strict delivery versus payment.
Settlement in USD
The funds settlement on VFEX will strictly be in United States Dollars (USD). Therefore all the cash inflows
that will be invested into the VFEX will be from FREE FUNDS or OFFSHORE FUNDS. The custodian and
custodian banks have to ensure that all investments onto the VFEX are received in correctly designated
accounts and they will be able to move the funds from the buyer’s FCA account to the sellers FCA account.
Disinvestments and Dividend proceeds from VFEX shall be deemed free funds and not subjected to any
restrictions or surrender requirements.