HARARE – The Securities and Exchange Commission of Zimbabwe (SecZim) is planning to introduce online trading and reporting of all securities transactions and investments across the entire capital markets in the country.
SecZim chief executive Tafadzwa Chinamo said the initiative was aimed at promoting financial inclusion, ease of doing business and securities market development and participation by the public on the local capital market.
“In line with the above development, custodians shall play a major role in the education and awareness programme to be instituted by the commission commencing this month for an initial period of six months and then on an annual basis,” he said.
This comes as online trading continues to grow in popularity. More than 14 million households in the United States are signed up with an online trading service, according to data from Statista.
Online trading offers access to almost any stock, bond or other type of security. It’s a viable alternative to traditional brick-and-mortar brokerage firms.
Market watchers say with online trading, or e-trading, the trader makes all decisions himself. Such an approach to trading differs from using a stockbroker, as the broker typically offers input and advice.
Another difference is in the fees – online trading is generally considerably less expensive than using a stockbroker to make trades.
Chinamo said SecZim believes this development will allow investors to trade and can benefit from stock market bull runs as well as receive reports on their investments timeously.
Information gathered by businessdaily shows that online trading also gives investors more control and flexibility.
Time is often of the essence when you trade stocks, so the speed of using online trading portals is a benefit to many investors. With online trading, you can execute a trade almost immediately.
Traditional brick-and-mortar brokers might require appointments, either online, over the phone or in person, just to initiate a trade. The time involved in such transactions is an inconvenience in the best of circumstances and can actually cost you money in the worst scenarios.
Experts also assert that by taking trading into your own hands, you can eliminate brokerage bias. Bias sometimes occurs when a broker gives financial advice that benefits the broker — such as in the form of a commission for selling specific mutual funds and other products.
This kind of biased advice can be troublesome for any investor and might even lead to investment decisions that are good for the broker.
Many online trading sites offer stock quotes and trade information that make it easy for people to see how their investments are doing in real time.
However, the disadvantage of online trading is that you’re at the mercy of your Internet connection. If the Internet connection is too slow or is interrupted, you can lose out on a potentially important or lucrative trade.