The securities and exchange commission in Africa’s copper hotspot has cancelled an operational license for Panex commodity exchange. PANEX anchors an ecosystem of farmers, warehouse and logistics operators, brokers, traders and commercial banks. This platform was well known for facilitation of investments of smaller than usual magnitude in government securities which ideally would not be possible through direct dealing with the central bank on account of scale. This was done through a pooling process that built a significant deposit that would then bid for participation in government security auctions.
With less than 2 years of operation, PANEX license has been cancelled on the back of irregularities and failure to meet the SEC standards.
Sources close to the matter reveal that the exchange failed to meet some key provisions of the securities and exchange Act with a model that was inconsistent with its core business. This led to the regulators conclusion that the exchange couldn’t not demonstrate adequacy in risk management of investors funds and as such triggered the license revokation decision in accordance with section 27 of of the SEC Act of 2016.
The regulator has nonetheless clarified that all securities traded before the license revocation will live their life space to maturity. This offers a protection life line to investors.
The Cynical Investor edited by the Kwacha Arbitrageur
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