RETAILBASE MARKETS TOKENIZED EQUITY PILOT PROGRAM

Issuer: Procode Platforms Private Limited (“Procode“)

Platform: RetailBase Markets

Jurisdiction: Republic of Zimbabwe

Regulatory Framework: Securities and Exchange Act [Chapter 24:25] (as amended by the Finance Act of 2025), SECZIM Regulatory Sandbox

Technology Stack: Polygon Blockchain (Modified ERC-20 Standard)

Executive Summary

Procode Platforms Private Limited hereby introduces RetailBase Markets, a pioneering financial technology platform designed to bridge the gap between traditional capital markets and the digital economy in Zimbabwe and Africa. This Prospectus outlines the issuance of Ledger-Based Securities (“Tokens”, “Virtual Tokens”, “Virtual Assets”) that function as 1:1 backed Tracker Certificates. Each Token represents the economic interest in specific equity shares listed on the Victoria Falls Stock Exchange (VFEX) or any future exchange as will be mentioned in such case. By leveraging blockchain technology, RetailBase Markets eliminates traditional market frictions, offering retail investors fractional ownership, real-time (T+0) settlement, and 24/7 trading accessibility within a secure, regulated framework. This platform is being introduced under the main regulator for Virtual Assets in Zimbabwe, SECZIM’s regulatory sandbox.

Executive Summary

Part 1: Introduction And Overview

The Issuer and the Program
Purpose and Objectives
Regulatory Environment in Zimbabwe
Mechanics of the Tokenization Model
Important Warnings to Investors
Technology and Smart Contract Security
Forward-Looking Statements

Part 2: Legal Definitions And Glossary

General Definitions
Interpretations and Construction
Parties to the Program

Part 3: Tokenization Model And Description Of The Tokens

Legal Nature of the Security Tokens
The Tokenization Process (Lifecycle)
Technical Specifications of the Tokens
Economic Rights and Dividend Equivalents
Security and Transfer Restrictions
Collateral and Limited Recourse

Part 4: Rights Of Token Holders

Nature of the Rights
Economic Rights (The “Tracker” Entitlement)
Corporate Actions and Governance
Right to Information and Transparency
Redemption Rights
Rights in the Event of Insolvency (Segregation)
Transferability and Restrictions

Part 5: Pricing Mechanism And Trading Market Structure

The Primary Market Linkage (Price-Tracker Model)
The 15% Circuit Breaker Mechanism
Trading Hours and 24/7 Availability
Order Book and Matching Engine
Liquidity and Market Making
Fees and Transaction Costs
Price Discovery During Volatility

Part 6: AML/KYC And Security Features

Compliance Philosophy
The Onboarding Process (KYC/CDD)
Smart Contract Security: The Whitelist
Anti-Money Laundering (AML) Monitoring
Technological Security Measures
Data Privacy and Protection

Part 7: Taxation And Legal Considerations In Zimbabwe

Taxation of Tokenized Securities
Legal Considerations and Classification
Exchange Control Regulations
Disclaimer on Tax Advice

Part 8: Conflicts Of Interest And Dispute Resolution

Conflicts of Interest
Dispute Resolution Framework
Governing Law
Limitation of Liability
Class Action Waiver

Part 9: General Information And Sandbox Program Terms

Nature of the Sandbox Program
Scope and Duration
Eligibility for Participation
Investment Limits (Sandbox Phase)
Specific Terms and Conditions of the Pilot
Conversion to Full Launch
Withdrawal from the Pilot
Regulatory Disclaimer

Part 1: Introduction And Overview

1. The Issuer and the Program

Procode Platforms Private Limited (the “Issuer“), a private limited company incorporated and existing under the laws of the Republic of Zimbabwe, hereby establishes a SECZIM Regulatory Sandbox Program for the issuance of Ledger-Based Securities (the “Program“). Under this Program, the Issuer may from time-to-time issue series of security tokens (each a “Security Token” or “Token“) that function as Blockchain-based Tracker Certificates. These Tokens are designed to track the economic performance and price of specific underlying equity instruments (the “Underlying“) listed on the Victoria Falls Stock Exchange (VFEX). The Program is operated through the Issuer’s proprietary platform, RetailBase Markets (retailbasemarkets.com and all linked sub-domains), which serves as the primary interface for minting, redeeming, and trading these tokenized assets.

2. Purpose and Objectives

The primary objective of the Program is to modernize and democratize access to the Zimbabwean capital markets. Traditional market structures in Zimbabwe are characterized by:

Settlement Delays: Standard T+2 settlement cycles that restrict liquidity.
High Entry Barriers: Lack of fractional ownership, preventing retail participation in high-value stocks.
Restricted Access: Trading limited to traditional exchange hours and requiring significant paperwork.

The RetailBase Markets platform addresses these inefficiencies by utilizing the Polygon Blockchain to provide a market that settles in real-time, allows for fractional ownership of VFEX stocks, and remains operational 24/7.

2. Regulatory Environment in Zimbabwe

This Prospectus is prepared in the context of significant legal evolution in Zimbabwe. The Finance Act of 2025 has provided much-needed legal clarity by amending the Securities and Exchange Act [Chapter 24:25] to formally recognize “Virtual Assets” and “Tokenized Securities” as regulated financial instruments. The Issuer is a registered entity in Zimbabwe and operates under the direct supervision of the Securities and Exchange Commission of Zimbabwe (SECZIM). At the date of this Prospectus, the Issuer is initiating a Regulatory Sandbox Phase of the platform with SECZIM. While full regulatory licensing is pending, the Sandbox is designed to demonstrate the “Price-tracker” model’s stability and the efficacy of the modified ERC-20 security protocols to the Commission and the market.

4. Mechanics of the Tokenization Model

The Tokens issued under this Program are 1:1 backed by physical shares. For every Token minted on the Polygon network, the Issuer or its designated Broker acquires an equivalent number of shares from the primary market of the VFEX. These shares are then placed into the custody of a third-party, SECZIM-licensed custodian within the Central Securities Depository (CSD) system to ensure the security of the underlying collateral. The Tokens utilize a Price-Tracker Model. To maintain price stability and alignment with the primary market, the RetailBase Markets platform implements a 15% circuit breaker. This mechanism prevents the trading price of a Token from deviating more than 15% from the last recorded price on the VFEX, thereby protecting investors from extreme decoupling or artificial volatility.

5. Important Warnings to Investors

Investments in Security Tokens are highly speculative and involve a high degree of risk, including the risk of a total loss of all capital invested.

No Deposit Protection: Unlike bank deposits, the Tokens are not covered by the Deposit Protection Corporation (DPC) of Zimbabwe.
Issuer Risk: The Tokens are obligations solely of the Issuer. If the Issuer becomes insolvent, investors bear the risk of loss, subject to the collateralization arrangements described in Section 4.
Complexity: These are complex financial products. Investors must ensure they have sufficient knowledge and experience to assess the risks related to blockchain technology and the underlying equity markets.
No Voting Rights: Holding a Token entitles the holder to the economic benefits (such as price appreciation and dividend equivalents) of the underlying share, but does not grant the holder voting rights in the underlying company’s AGMs.

6. Technology and Smart Contract Security

The Issuer utilizes the Polygon Network, a Layer-2 scaling solution for Ethereum, chosen for its high throughput and low transaction costs. The Tokens are issued via a modified ERC-20 smart contract. A critical security feature of these contracts is the AML/KYC Whitelist. Only “Onboarded Purchasers”, users who have successfully completed the Issuer’s identity verification and Anti-Money Laundering (AML) checks, are capable of holding or transferring the Tokens. This ensures that the platform remains compliant with the Money Laundering and Proceeds of Crime Act [Chapter 9:24] and prevents the unauthorized secondary transfer of securities to unverified parties.

7. Forward-Looking Statements

This Base Prospectus contains statements that may be deemed “forward-looking,” including plans regarding the expansion of the Program and future regulatory approvals. These statements are based on the Issuer’s current expectations and are subject to risks and uncertainties. Actual results may differ materially from those predicted.

RESPONSIBILITY STATEMENT

The Directors of Procode Platforms Private Limited:

Accept responsibility for the information contained in this Prospectus.
Declare that, to the best of their knowledge, the information provided is in accordance with the facts and contains no omissions likely to affect its import.

Part 2: Legal Definitions And Glossary

8. General Definitions

In this Prospectus and any associated Final Terms, the following terms shall have the meanings set forth below, unless the context requires otherwise:

“AML/KYC Procedures” means the “Know Your Customer” and “Anti-Money Laundering” due diligence processes conducted by the Issuer in accordance with the Money Laundering and Proceeds of Crime Act [Chapter 9:24] of Zimbabwe and international FATF standards.
“Base Currency” means the currency in which the underlying shares are denominated on the VFEX, typically United States Dollars (USD) or Zimbabwean Gold (ZiG).
“Blockchain” means the Polygon Network, a decentralized ledger used to record the issuance, transfer, and ownership of the Tokens.
“Circuit Breaker” means the price-volatility protection mechanism which prevents Token trading on the RetailBase Markets Platform if the price deviates by more than 15% from the last recorded primary market price on the VFEX.
“CSD” means a Central Securities Depository licensed by the Securities and Exchange Commission of Zimbabwe (SECZIM).
“Custodian” means a third-party financial institution licensed by the SECZIM to hold and safeguard the Underlying Shares in electronic form within the CSD system for the benefit of Token holders.
“Dividend Equivalent Payment” means a contractual payment made by the Issuer to Token holders, equal to the net cash dividend (after statutory taxes) paid by the issuer of the Underlying Shares.
“ERC-20 (Modified)” means the technical standard for smart contracts on the Polygon blockchain, modified by the Issuer to include restrictive functions such as freeze, unfreeze, and transfer-only-to-whitelisted-address.
“Finance Act of 2025” means the legislation of the Republic of Zimbabwe which amended the Securities and Exchange Act [Chapter 24:25] to include provisions for Virtual Assets and Tokenized Securities.
“Issuer” means Procode Platforms Private Limited, a company incorporated in Zimbabwe.
“Onboarded Purchaser” means a retail or institutional investor who has successfully completed the AML/KYC Procedures and whose digital wallet address has been added to the Whitelist.
“Price-Tracker Model” means the issuance structure where the Token is designed to replicate the economic performance of an Underlying Share without providing legal title to the physical share in the CSD to the investor.
“Redemption” means the process where a Token holder returns the Token to the Issuer’s “Burn Address” in exchange for the cash value of the Underlying Shares.
“RetailBase Markets” means the proprietary digital platform and order book operated by the Issuer for the subscription and trading of Tokens.
“Secondary Market” means the trading of Tokens between whitelisted users on the RetailBase Markets platform’s open order book.
“Security Token” (or “Token”) means a ledger-based security issued by the Issuer on the Polygon network representing a 1:1 economic interest in an Underlying Share.
“T+0 Settlement” means the near-instantaneous finality of transactions achieved on the Blockchain, replacing the traditional T+2 settlement cycle of the VFEX.
“Underlying Share” means the specific equity security listed on the Victoria Falls Stock Exchange (VFEX) that the Token seeks to track.
“VFEX” means the Victoria Falls Stock Exchange.
“Whitelist” means the database of blockchain addresses belonging to Onboarded Purchasers who are legally permitted to hold and trade the Tokens.

9. Interpretations and Construction

Unless otherwise specified:

References to Laws: Any reference to a statute or statutory provision includes a reference to that provision as amended, re-enacted, or extended from time to time, including the Finance Act of 2025.
Singular and Plural: Words importing the singular include the plural and vice versa.
Headings: Section and subsection headings are for convenience only and do not affect the interpretation of this Prospectus.
Economic Ownership: The term “Economic Ownership” refers to the right to receive the financial benefits of an asset (price appreciation and dividends) without the legal right to vote or participate in corporate governance as a shareholder of record.
Smart Contract Primacy: In the event of a technical discrepancy between the human-readable text of this Prospectus and the logic of the Modified ERC-20 Smart Contract, the human-readable text shall prevail for legal interpretation, provided the Issuer may pause the contract to rectify any such logic errors.

10. Parties to the Program

The Tokenizer: Procode Platforms Private Limited, in its capacity as the technical architect and minter of the Tokens.
The Custodian: A SECZ-licensed securities custodian responsible for storing securely the Underlying Shares from the VFEX.
The Verification Agent: An independent party or automated system tasked with verifying that the number of Tokens in circulation does not exceed the number of Underlying Shares held in custody.

CONFIRMATION OF TERMS: By interacting with the RetailBase Markets platform or holding a Token, the investor is deemed to have read, understood, and agreed to these definitions and the full terms and conditions of this Base Prospectus.

Part 3: Tokenization Model And Description Of The Tokens

11. Legal Nature of the Security Tokens

The Security Tokens issued under this Program are defined as Ledger-Based Securities. Legally, each Token represents a Blockchain-based Tracker Certificate, which is a debt instrument issued by the Issuer that seeks to track the economic performance of a specific Underlying Share. The Tokens are not equity in the Issuer itself; rather, they are obligations of the Issuer to provide the holder with a “Redemption Amount” that corresponds to the value of the underlying collateral. These digital assets are created via recordation in a smart-contract-based Securities Ledger on the Polygon blockchain.

12. The Tokenization Process (Lifecycle)

The process of “Tokenization” is defined as the legal linking of a transferable obligatory position with a digital token. On the RetailBase Markets platform, this occurs through the following continuous process:

Acquisition of Underlying: The Issuer (acting through a licensed Broker) purchases shares on the primary VFEX market.
Collateralization: The acquired shares (the “Standard Collateral“) are credited to the Issuer’s collateral accounts held with a SECZ-licensed Custodian. These assets serve to secure the payment obligations of the Issuer under this Prospectus.
Minting and Issuance: Once the Custodian confirms receipt of the Underlying Shares, the smart contract mints an equivalent 1:1 ratio of Tokens. These are then delivered to a whitelisted blockchain address of the Issuer or a Purchaser.
Continuous Tracking: The issuance and redemption mechanism is a continuous process active at all times that the VFEX is available for trading with limitations and conditions.

13. Technical Specifications of the Tokens

Blockchain Protocol: The Tokens are issued on the Polygon Network, utilizing a modified ERC-20 standard.
Securities Ledger: The smart contract address serves as the official Securities Ledger. The Issuer publishes a link to the record of transactions for each Token on the RetailBase Markets website to ensure transparency.
Fractionalization: Unlike traditional VFEX shares, the smart contract allows for the division of a single Token into decimal places (up to 2 decimals), enabling retail investors to purchase fractions of high-value stocks.
Open-Ended Maturity: The Tokens are generally “open-ended” and do not have a predetermined fixed maturity date, instead providing a redemption right to the investor and a call option to the Issuer.

14. Economic Rights and Dividend Equivalents

While Token holders do not hold legal title to the physical shares in the CSD, they are contractually entitled to the “Economic Ownership” of those shares:

Price Participation: Through the Token, investors participate directly in the price performance (gains or losses) of the Underlying Share.
Dividend Equivalents: The Issuer is obligated to pass through any dividends received from the Underlying Shares to the Token holders, net of applicable Zimbabwean withholding taxes and administrative fees.
No Governance Rights: The Tokens do not grant any voting rights or any opportunity to influence decisions affecting the underlying companies listed on the VFEX. This is subject to change in the near future.

15. Security and Transfer Restrictions

The Tokens are freely transferable between users, but only under the conditions set forth in this Prospectus.

Whitelist Enforcement: The smart contract logic prevents the transfer of Tokens to any address that has not been “Onboarded” through the Issuer’s AML/KYC portal.
Pausing Functionality: The Issuer retains the technical capability to “pause” all transactions in the event of a technological change, discovery of a vulnerability, or hack attempts to ensure the functionality of the Securities Ledger.
Recovery/Freezing: Under specific legal requirements (such as a court order), the Issuer has the power to “burn, recover, freeze, or unfreeze” Tokens to remain in compliance with international legal and administrative assistance rules.

16. Collateral and Limited Recourse

Each series of Tokens is backed by a specific pool of collateral.

Priority of Claim: Token holders have a sole claim to the Collateral allocated to their specific Token type. This claim is senior to all other current and future unsecured obligations of the Issuer.
Limited Recourse: The Issuer’s obligations are “limited recourse” in nature. This means that if the proceeds from the realization of the Collateral are insufficient to pay the full Redemption Amount, the Token holder has no further claim against the Issuer or its shareholders. Once the pro-rata share of the Net Realization Proceeds is paid, the debt is considered satisfied.

Part 4: Rights Of Token Holders

17. Nature of the Rights

The Security Tokens are Ledger-Based Securities issued in accordance with the Securities and Exchange Act [Chapter 24:25] as amended by the Finance Act of 2025. By acquiring a Token, the holder enters into a contractual relationship with the Issuer. The rights attaching to the Tokens are in personam rights against the Issuer. While the Tokens track the value of shares listed on the Victoria Falls Stock Exchange (VFEX), they do not represent a direct equity holding in the underlying company. Instead, they represent a “Beneficial Interest” as recognized under Section 56 of the Companies and Other Business Entities Act [Chapter 24:31].

18. Economic Rights (The “Tracker” Entitlement)

The primary right of a Token holder is the right to participate in the economic performance of the Underlying Share. This includes:

Capital Appreciation: The right to receive a Redemption Amount that reflects the market value of the Underlying Share at the time of redemption, subject to the Price-Tracker Model and the 15% circuit breaker.
Dividend Equivalent Payments: Whenever the underlying company listed on the VFEX declares and pays a cash dividend, the Issuer is contractually obligated to pay a “Dividend Equivalent” to the Token holder.
1. Calculation: This payment is equal to the gross dividend received by the Custodian, less any applicable Zimbabwean withholding taxes, Intermediated Money Transfer Tax (IMTT), and a nominal administrative handling fee (as specified in the Final Terms).
2. Disbursement: These payments are typically disbursed in the same currency as the dividend (USD or ZiG) to the user’s verified platform wallet or bank account.

19. Corporate Actions and Governance

A fundamental distinction between a Token and a traditional share is the treatment of governance rights.

No Voting Rights: Token holders are not members of the underlying company and do not have the right to attend or vote at General Meetings (AGMs/EGMs) of the companies listed on the VFEX. The Issuer (or the Custodian) as the registered holder of the physical shares will generally abstain from voting unless otherwise specified in a specific Series Supplement.
Non-Cash Corporate Actions: In the event of bonus issues, rights issues, or stock splits affecting the Underlying Share, the Issuer will, at its sole discretion, either:
1. Adjust the number of Tokens held by the user to reflect the action (e.g., a 2-for-1 stock split results in the user holding double the Tokens at half the initial price); or
2. Sell the additional rights/shares and distribute the cash proceeds as a special dividend equivalent.

20. Right to Information and Transparency

Every Token holder has the right to verify the 1:1 backing of their assets. Procode Platforms provides:

Proof of Reserve: A real-time or weekly updated dashboard on the RetailBase Markets platform showing the total number of Tokens in circulation versus the total number of physical shares held in the CSD.
Blockchain Verification: Since the Tokens exist on the Polygon network, holders can verify their balance and the total supply of the smart contract at any time via a public block explorer.
Reporting: Holders will receive annual electronic statements summarizing their holdings, transactions, and any dividend equivalents received during the financial year.

21. Redemption Rights

Token holders have the right to “Exit” their position through two primary mechanisms:

Secondary Market Sale: Selling the Token to another Whitelisted user on the RetailBase Markets open order book for immediate T+0 settlement.
Platform Redemption: Requesting the Issuer to “burn” the Token and return the cash value. The Issuer will execute a sell order on the VFEX and remit the proceeds to the user.

Note: Redemptions are subject to the liquidity of the primary VFEX market.

22. Rights in the Event of Insolvency (Segregation)

To protect Token holders, the Issuer utilizes a Segregated Collateral Model:

Statutory Trust/Custody: The Underlying Shares are held by a SECZ-licensed third-party Custodian. Under the Securities and Exchange Act, assets held by a custodian for clients are strictly segregated from the custodian’s own assets.
Limited Recourse: In the event that Procode Platforms Private Limited enters liquidation, the underlying shares held in the CSD are “ring-fenced.” Token holders have a preferential claim over this specific pool of collateral, which cannot be used to satisfy the claims of the Issuer’s general creditors.

23. Transferability and Restrictions

The right to transfer Tokens is a core feature of the Program, but it is restricted to ensure regulatory compliance:

Whitelist Limitation: A Token holder may only transfer their Tokens to another wallet address that has been pre-approved (Whitelisted) by the RetailBase Markets compliance engine. Any attempt to transfer to an unverified address will be automatically rejected by the smart contract code.
Regulatory Compliance: The Issuer reserves the right to freeze or restrict the transfer of Tokens if required by the Financial Intelligence Unit (FIU) or under a valid court order from the High Court of Zimbabwe.

Part 5: Pricing Mechanism And Trading Market Structure

24. The Primary Market Linkage (Price-Tracker Model)

The RetailBase Markets platform operates as a secondary marketplace for Ledger-Based Securities that are intrinsically linked to the primary equity market of the Victoria Falls Stock Exchange (VFEX). The pricing of any Token Series is derived from the Official Closing Price and the Real-Time Bid/Ask Spread of the corresponding Underlying Share on the VFEX. This linkage ensures that the Token functions as a “Tracker Certificate,” providing investors with a digital instrument that mirrors the value of the physical asset held in the CSD.

25. The 15% Circuit Breaker Mechanism

To maintain the 1:1 backing integrity and protect investors from extreme price decoupling (where the Token price deviates significantly from the value of the underlying shares), the Issuer implements a Hard Circuit Breaker.

Reference Price: The “Reference Price” is the last traded price of the Underlying Share on the VFEX as reported by the exchange’s data feed.
Trading Band: The RetailBase Markets order book only permits the placement of buy and sell orders within a +/- 15% range of the Reference Price.
Order Rejection: Any order submitted outside of this 15% corridor will be automatically rejected by the Platform’s matching engine.
Market Suspension: In the event that the primary VFEX market suspends trading for a specific counter (e.g., due to a corporate cautionary or regulatory halt), trading of the corresponding Token on RetailBase Markets will be simultaneously suspended to prevent speculative arbitrage.

26. Trading Hours and 24/7 Availability

A core value proposition of the RetailBase Markets platform is its departure from traditional exchange hours.

Primary Market Hours: The VFEX typically operates between 09:00 and 15:00 CAT on business days. During these hours, the Token price may be updated in real-time based on VFEX trades.
After-Hours Trading: Outside of VFEX trading hours (nights, weekends, and public holidays), the RetailBase Markets open order book remains active. During these periods, the “Reference Price” is fixed at the last VFEX Closing Price.
T+0 Settlement: Unlike the T+2 settlement cycle in the traditional Zimbabwean market, all trades on the RetailBase Markets platform utilize the Polygon Blockchain for near-instant settlement. When a trade is matched, the smart contract executes the transfer of Tokens and stablecoins (or digital ZiG/USD equivalents) simultaneously, providing immediate finality.

27. Order Book and Matching Engine

The RetailBase Markets platform utilizes a Central Limit Order Book (CLOB).

Matching Priority: Orders are matched based on Price-Time Priority. The best price (highest bid or lowest ask) is filled first; if multiple orders exist at the same price, the order submitted earlier is prioritized.
Order Types: The platform initially supports Market Orders (executed immediately at the best available price) and Limit Orders (executed only at a specified price or better, subject to the 15% circuit breaker).
Fractional Trading: The matching engine is designed to handle “Micro-lots,” allowing retail investors to buy as little as 0.01 of a Token.

28. Liquidity and Market Making

To ensure that retail investors can enter and exit positions efficiently, the Issuer may appoint Designated Market Makers (DMMs).

Role of the DMM: The DMM is obligated to provide continuous two-way quotes (bid and ask) for each Token Series, ensuring there is always a “Floor” for liquidity.
Arbitrage and Balancing: If the Token price on RetailBase Markets moves to the edge of the 15% circuit breaker, the DMM (or the Issuer’s treasury) may facilitate the minting or burning of Tokens by buying or selling the underlying shares on the VFEX to bring the market back into equilibrium.

29. Fees and Transaction Costs

Trading on the RetailBase Markets platform is subject to a transparent fee structure designed to be lower than traditional brokerage costs in Zimbabwe:

Platform Trading Fee: A percentage fee (e.g., 0.50%) applied to the total value of the trade, deducted at the moment of settlement.
Blockchain Gas Fees: Since the platform operates on the Polygon Network, users may pay a nominal amount of MATIC (or the native network token) to cover the computation costs of the smart contract.
Statutory Taxes: The Issuer acts as a withholding agent for the Intermediated Money Transfer Tax (IMTT) where applicable, as mandated by the Finance Act of 2025.

30. Price Discovery During Volatility

In periods of extreme market volatility in Zimbabwe, the Issuer reserves the right to transition the market into an “Auction Mode“. During an auction, orders are collected but not immediately matched; at the end of the auction period, a single clearing price is calculated that maximizes the volume of traded Tokens. This prevents “flash crashes” and ensures a fair price discovery process in a digital-first environment.

Part 6: AML/KYC And Security Features

31. Compliance Philosophy

The Issuer operates on the principle of “Identified Participation.” While the RetailBase Markets platform leverages the decentralized nature of the Polygon blockchain for settlement, the entry and exit points are strictly centralized and regulated. Every participant in the ecosystem must be a verified “Onboarded Purchaser.” This hybrid approach combines the efficiency of blockchain with the regulatory rigor required by the Securities and Exchange Commission of Zimbabwe (SECZ) and the Financial Intelligence Unit (FIU).

32. The Onboarding Process (KYC/CDD)

Before any user can hold, buy, or sell Tokens, they must undergo a mandatory Customer Due Diligence (CDD) process. This process is tiered based on the investor’s profile and anticipated transaction volume:

Identity Verification: Natural persons must provide a valid Zimbabwean National ID or Passport. Digital “Live Check” facial recognition is used to prevent identity theft.
Proof of Residence: You may be required to submit a utility bill or bank statement not older than three months to confirm Zimbabwean residency (or eligibility in permitted jurisdictions).
Source of Funds (SoF): For transactions exceeding the “Simplified Due Diligence” thresholds set by the FIU, users must provide documentation (e.g., payslips, audited accounts, or sale of asset agreements) proving the legitimate origin of their investment capital.
Institutional Onboarding: Corporate entities must provide incorporation documents, a register of directors, and identify the Ultimate Beneficial Owner (UBO) to ensure no illicit actors are hiding behind corporate veils.

33. Smart Contract Security: The Whitelist

The core security feature of the RetailBase Markets platform is the Smart Contract Whitelist. Unlike standard ERC-20 tokens which can be sent to any address, the Issuer’s modified contract includes a transfer hook that checks a central registry before any movement of funds.

Execution Logic: If Address A attempts to send Tokens to Address B, the smart contract queries the isWhitelisted mapping. If Address B is not verified, the transaction fails on-chain.
Non-Custodial Compatibility: This feature allows users to keep their Tokens in their own private wallets (e.g., MetaMask or hardware wallets) while ensuring they cannot accidentally or intentionally transfer securities to unverified parties.
Regulatory “Kill Switch”: In compliance with the Money Laundering and Proceeds of Crime Act, the Issuer maintains a freeze function. If a user is flagged by the FIU or becomes a “Sanctioned Person,” the Issuer can instantly freeze the Tokens in that specific address, preventing further movement pending legal investigation.

34. Anti-Money Laundering (AML) Monitoring

The Issuer employs real-time on-chain and off-chain monitoring tools to detect suspicious patterns:

Transaction Monitoring: Automated systems flag unusual activity, such as rapid “layering” (multiple small transactions to hide a large sum) or “structuring” (staying just below reporting thresholds).
Sanctions Screening: All users are screened daily against global watchlists (UN, OFAC) and the Zimbabwean domestic sanctions list.
Suspicious Transaction Reports (STRs): In accordance with Section 30 of the AML Act, any transaction suspected of being linked to money laundering or terrorist financing will be reported to the FIU within the statutory 72-hour window.

35. Technological Security Measures

Beyond regulatory compliance, the platform implements bank-grade technical security:

Multi-Signature (Multi-Sig) Governance: The “Mint” and “Burn” functions of the Token contracts are not controlled by a single person. They require the cryptographic approval of multiple authorized officers (e.g., Compliance Officer, CTO, and CEO).
Cold Storage for Underlying: While the Tokens are “hot” on the blockchain, the physical shares remain in the “cold” electronic environment of the CSD system, protected by the Custodian’s institutional-grade vaults.
Audits: The Issuer commits to an annual Smart Contract Audit by a reputable cybersecurity firm and a Collateral Audit by a SECZ-registered auditor to confirm that the number of Tokens in circulation exactly matches the shares in the CSD.

36. Data Privacy and Protection

The Issuer complies with the Cyber and Data Protection Act [Chapter 12:07].

Data Minimization: We only collect the data required for legal compliance.
Encryption: All sensitive KYC documents are encrypted at rest and in transit.
Privacy Rights: Users have the right to access their data and request its deletion, subject to the Issuer’s legal obligation to retain AML records for a period of ten (10) years post-relationship.

Part 7: Taxation And Legal Considerations In Zimbabwe

37. Taxation of Tokenized Securities

The taxation of Security Tokens in Zimbabwe is governed by the Income Tax Act [Chapter 23:06] and the Capital Gains Tax Act [Chapter 23:01], as amended by subsequent Finance Acts. Investors should note that the tax treatment of “Virtual Assets” and “Tokenized Securities” is a rapidly evolving area of law.

A. Capital Gains Tax (CGT)

Under current Zimbabwean law, specifically relating to assets listed on the Victoria Falls Stock Exchange (VFEX), there is a significant tax incentive for investors:

Exemption on VFEX: Historically, marketable securities listed on the VFEX have been exempt from Capital Gains Tax to encourage foreign direct investment and local participation in the offshore-linked exchange.
Tokenized Equities: Since the Tokens issued by the Issuer are 1:1 backed by VFEX-listed shares and function as “Tracker Certificates,” the Issuer seeks to maintain this tax neutrality. However, if the Zimbabwe Revenue Authority (ZIMRA) classifies the disposal of a Token as a separate taxable event from the underlying share, a CGT rate (typically 20% on the gain, or 5% on the gross proceeds for assets acquired before 2009) may apply. Investors are advised to monitor ZIMRA’s specific rulings on “Digital Asset Disposal.“

B. Withholding Tax on Dividends

As the Tokens grant “Dividend Equivalent Rights,” the tax treatment follows the underlying asset:

Local Investors: Dividends from VFEX-listed companies paid to Zimbabwean residents are generally subject to a 10% withholding tax.
Foreign Investors: Under the VFEX incentive framework, withholding tax on dividends for non-residents is reduced to 5%.
Issuer Obligation: The Issuer will withhold these amounts at the source before distributing the net “Dividend Equivalent” to the Token holder’s wallet.

C. Intermediated Money Transfer Tax (IMTT)

The Finance Act of 2025 and subsequent 2026 regulations maintain the IMTT on electronic transfers.

Transaction Tax: Transfers of funds to the platform for the purchase of Tokens, and the subsequent trading of Tokens for stablecoins or digital ZiG/USD on the secondary market, attract IMTT.
Rates: For transactions in USD, the rate is 2%. For transactions in the local currency (ZiG), the rate is 1.5%. The Issuer is a statutory withholding agent and will deduct these amounts automatically during the “Buy” or “Sell” execution.

D. Digital Services Withholding Tax (DSWT)

Commencing January 1, 2026, Zimbabwe introduced a 15% Digital Services Withholding Tax on payments made to offshore digital platforms.

1. Application to RetailBase Markets: As a locally registered entity (Procode Platforms Private Limited), the Issuer is generally exempt from DSWT on its domestic operations. However, if a Zimbabwean investor uses a foreign-issued card or an offshore payment gateway to fund their account, the 15% DSWT may be triggered by the intermediary bank.

38. Legal Considerations and Classification

The legal status of the Tokens is defined by the intersection of traditional corporate law and new digital asset regulations.

A. The Finance Act of 2025

This Act provided the first comprehensive definition of “Virtual Asset Service Providers” (VASPs) in Zimbabwe. The Issuer is classified as a VASP and a “Tokenizer of Securities.” This classification requires the Issuer to maintain higher capital adequacy ratios and stricter reporting standards than traditional software companies.

B. Securities and Exchange Act [Chapter 24:25]

The Tokens are deemed “Securities” under the expanded definition of the Act. Consequently:

Market Abuse: The “insider trading” and “market manipulation” provisions of the Act apply to the RetailBase Markets platform. Using non-public information about a VFEX-listed company to trade its corresponding Token is a criminal offense in Zimbabwe.
Prospectus Liability: The Issuer is legally liable for any material misstatements or omissions in this Prospectus under the oversight of the SECZIM.

C. Companies and Other Business Entities Act [Chapter 24:31]

While the Tokens utilize blockchain technology, the underlying ownership of the shares remains governed by the COBE Act. The Issuer maintains a Register of Beneficial Owners (the Blockchain Whitelist), which may be inspected by the Registrar of Companies to ensure transparency and prevent the use of tokenization for illicit “shell” company structures.

39. Exchange Control Regulations

The Victoria Falls Stock Exchange operates in a “multi-currency” environment with a preference for hard currency (USD).

Repatriation: Foreign investors who purchase Tokens using USD are generally entitled to repatriate their initial investment and any capital gains/dividends in USD, subject to standard Exchange Control (EXCON) documentation.
Dual-Currency Operations: The RetailBase Markets platform may allow for “ZiG-to-USD” price tracking, but investors must comply with the prevailing Reserve Bank of Zimbabwe (RBZ) directives regarding the use of local currency for the purchase of foreign-denominated assets.

40. Disclaimer on Tax Advice

THE SUMMARY ABOVE IS NOT INTENDED TO CONSTITUTE TAX OR LEGAL ADVICE.

Taxation is a complex area, and the tax consequences of an investment in Tokens depend on the individual circumstances of each investor. Prospective purchasers are strongly urged to consult their own tax advisors regarding the tax consequences of acquiring, holding, and disposing of Tokens under Zimbabwean law.

Part 8: Conflicts Of Interest And Dispute Resolution

41. Conflicts of Interest

Procode Platforms Private Limited (the “Issuer“) and its affiliates engage in a range of activities relating to the RetailBase Markets platform and the underlying securities. These roles may, from time to time, give rise to conflicts of interest. The Issuer is committed to managing these conflicts in accordance with the Securities and Exchange Act [Chapter 24:25] and the Corporate Governance Code of Zimbabwe.

A. Dual Roles as Issuer and Market Operator

The Issuer acts as the entity issuing the Security Tokens and also operates the RetailBase Markets platform where these Tokens are traded. This creates a potential conflict where the Issuer’s interest in platform volume may conflict with its duty to maintain a stable “Price-Tracker” mechanism.

Mitigation: The 15% circuit breaker is an automated smart contract function that cannot be manually overridden for individual profit. Furthermore, the Issuer maintains a “Chinese Wall” policy between the technical team managing the blockchain infrastructure and the treasury team managing the underlying share purchases on the VFEX.

B. Market Making and Liquidity Provision

The Issuer or its affiliates may act as a Designated Market Maker (DMM). In this capacity, the Issuer may trade Tokens for its own account to provide liquidity.

Mitigation: All DMM trades are executed on the same “Open Order Book” as retail investors. The DMM is prohibited from using non-public information regarding pending VFEX trades to “front-run” RetailBase Markets users. Any proprietary trading by the Issuer is subject to periodic audit by the Securities and Exchange Commission of Zimbabwe (SECZ).

C. Remuneration and Incentives

Directors or employees of Procode Platforms may hold Tokens as part of their compensation or personal investment portfolios.

Mitigation: The Issuer has implemented a “Staff Trading Policy” which mandates disclosure of holdings and prohibits trading during “Closed Periods” (e.g., prior to the release of platform audits or significant regulatory updates).

42. Dispute Resolution Framework

By participating in the Program and using the RetailBase Markets platform, the Investor agrees to the following tiered dispute resolution process.

A. Internal Complaint Handling

In the first instance, any dispute or claim arising out of or in connection with the Tokens must be submitted to the RetailBase Markets Compliance Department via the official “Dispute Portal” on the platform. The Issuer is obligated to provide a written response or resolution proposal within fourteen (14) business days.

B. Mediation

If the dispute is not resolved through internal channels, the parties may agree to refer the matter to non-binding mediation under the rules of the Commercial Arbitration Centre (CAC) in Harare. Mediation shall be conducted in English and held in Harare, Zimbabwe.

C. Binding Arbitration

If mediation fails or is waived, the dispute shall be referred to and finally resolved by binding arbitration.

Seat of Arbitration: Harare, Zimbabwe.
Rules: The arbitration shall be conducted in accordance with the Arbitration Act [Chapter 7:15] of Zimbabwe.
Tribunal: The tribunal shall consist of a single arbitrator appointed by the Chairman of the Commercial Arbitration Centre in Harare. The arbitrator must have specialized knowledge in both Zimbabwean securities law and distributed ledger technology.
Language: The language of the arbitration shall be English.
Finality: The award rendered by the arbitrator shall be final and binding on both parties, and judgment upon the award may be entered in the High Court of Zimbabwe.

43. Governing Law

This Base Prospectus, the Security Tokens, and any non-contractual obligations arising out of them are governed by, and shall be construed in accordance with, the Laws of the Republic of Zimbabwe. This includes, but is not limited to:

The Finance Act of 2025 (regulating Virtual Assets).
The Securities and Exchange Act [Chapter 24:25].
The Companies and Other Business Entities Act [Chapter 24:31].

44. Limitation of Liability

Except in cases of gross negligence, willful misconduct, or fraud, the Issuer’s liability to any Token holder is strictly limited to the Net Realization Proceeds of the Underlying Collateral. The Issuer shall not be liable for:

Network Failure: Disruptions in the Polygon blockchain or Ethereum mainnet that are outside the Issuer’s control.
Regulatory Change: Losses stemming from changes in Zimbabwean law or RBZ directives that restrict the tradability of digital assets.
User Error: Loss of private keys or unauthorized access to a user’s whitelisted wallet due to the user’s failure to maintain cybersecurity hygiene.

45. Class Action Waiver

To the extent permitted under Zimbabwean law, investors agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated, or representative action.

Part 9: General Information And Sandbox Program Terms

46. Nature of the Program

Procode Platforms Private Limited (the “Issuer“) is launching the RetailBase Markets platform under a Controlled Sandbox Phase. This phase is designed to demonstrate the technical viability of the Price-Tracker Model and the security of the Modified ERC-20 Smart Contracts within the Zimbabwean capital markets. The Program serves as a “Regulatory Sandbox” environment. While the Issuer is registered and compliant with the Finance Act of 2025, this phase allows for the live testing of real-time settlement (T+0) and fractional ownership before a full-scale commercial rollout.

47. Scope and Duration

Commencement Date: June 12, 2026.
Duration: The Program is intended to run for an initial period of six (6) months, subject to extension or early termination at the discretion of the Issuer or the Securities and Exchange Commission of Zimbabwe (SECZ).
Participation Limit: During the Program, the platform may implement a “Waitlist” system. The total number of active retail investors may be capped to ensure system stability and manageable oversight.
Asset Coverage: The Program will initially support a curated selection of high-liquidity stocks listed on the Victoria Falls Stock Exchange (VFEX). Additional counters will be added incrementally upon successful stress testing of the liquidity providers.

48. Eligibility for Participation

To participate in the Program, an individual or entity must:

Be a verified Onboarded Purchaser (having passed all AML/KYC checks).
Be a resident of Zimbabwe or a permitted jurisdiction as defined in the Final Terms.
Acknowledge that they understand the experimental nature of blockchain-based financial instruments.
Maintain a compatible digital wallet that has been successfully Whitelisted by the RetailBase Markets compliance engine.

49. Investment Limits (Sandbox Phase)

To protect retail investors during this testing phase, the following “Soft Caps” apply:

Maximum Individual Exposure: No single retail investor may hold more than the equivalent of USD 5,000 (or ZiG equivalent) in total Token value across all series.
Transaction Limits: Maximum daily buy/sell volume per user is capped at USD 1,000 to prevent market distortion during the liquidity testing phase.
Issuer Discretion: The Issuer reserves the right to adjust these limits upward or downward based on market volatility and regulatory feedback.

50. Specific Terms and Conditions of the Program

By participating in the Program, users agree to the following supplemental terms:

A. “As-Is” Technology Acknowledgment

The user acknowledges that the RetailBase Markets platform and the underlying smart contracts are in a “Sandbox” state. While the Issuer has conducted internal audits, the user accepts the risk of potential technical “bugs,” network congestion on the Polygon blockchain, or temporary platform downtime.

B. Right to Rollback or Halt

In the event of a critical smart contract vulnerability or a major decoupling of the Token price from the VFEX primary market (beyond the 15% circuit breaker), the Issuer reserves the right to:

Temporarily suspend all trading and minting/burning functions.
“Freeze” Tokens in the Securities Ledger to protect the value of the underlying collateral.
In extreme cases, execute a mandatory redemption of all outstanding Tokens at the last verified “Fair Market Value.”

C. Feedback Obligation

As a participant in the Program, the user may be requested to provide feedback regarding the user interface, settlement speed, and overall platform experience. This data will be used to improve the platform for the full commercial launch and will be shared in an anonymized format with the SECZIM.

51. Conversion to Full Launch

Upon the conclusion of a successful Program and receipt of a full operating license under the Securities and Exchange Act, all Tokens issued during the Pilot will remain valid and will automatically transition into the standard Program. Users will not be required to re-onboard unless there has been a change in their KYC status or a significant update to Zimbabwean AML laws.

52. Withdrawal from the Program

Users may withdraw from the Program at any time by selling their Tokens on the secondary market or requesting a redemption. Upon redemption, the user’s wallet will be removed from the Whitelist unless they choose to remain “Onboarded” for future issuances.

53. Regulatory Disclaimer

The Program is conducted in the context of the legislative clarity provided by the Finance Act of 2025. However, participation in the Sandbox Program does not guarantee that the SECZ will grant a permanent license at the end of the program. In the event that a permanent license is denied, the Issuer will wind down the Program and return all collateral value to Token holders in accordance with the Redemption provisions in Section 4.5.