CMT rules on the validity of reversing matched and executed stock exchange transactions

DAR ES SALAAM: THE Capital Markets Tribunal (CMT) has ruled on the validity of reversing matched and executed stock exchange transactions, emphasising the need to safeguard market stability and certainty in trading activities.

A statement issued by the Tribunal’s Registrar, Dr Martin Kolikoli, said the decision was delivered in an appeal before the Tribunal.

According to the ruling, operational or data-entry errors made by brokers cannot, on their own, constitute sufficient grounds for reversing transactions that have already been matched and executed.

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The Tribunal clarified that such transactions are final and legally binding on all parties involved, providing certainty and protecting the integrity of the capital markets.

It further stated that a transaction may only be reversed where there is evidence of fraud, deliberate misrepresentation or serious fundamental errors that could not reasonably have been anticipated, rather than broker negligence or typographical mistakes.

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