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Single Securities Depository will be investor friendly – Tsheole

Single Securities Depository will be investor friendly – Tsheole
April 24
09:52 2018

Real time transactions in the offing


The Botswana Stock Exchange (BSE) is pursuing the establishment of a single national central depository for Botswana after the Central Securities Depository system was approved as the basis for establishment of the single CSD for the country.

The CSD system will be connected to the Botswana Interbank Settlement System (BISS) to ensure guaranteed settlement in Central Bank money and attainment of DVP model 1 as well as Straight Through Processing (STP) by integrating with the Real Time Gross Settlement (RTGS) system of the Bank.

The BSE has floated a tender to procure a new CSD system. This tender is open for international bidding. It is this new CSD system that will also broaden the functionalities of the CSD and open new revenue streams by introducing new services and products.

BSE and CSDB are also in the early stages of establishing a Settlement Guarantee Fund (SGF) in line with the provisions of the Securities Act. He said the new system will most likely push up the ratings of the local bourse. The current Thomas Murray proprietary rating of the CSD system, supplied by M Investment and Trade, is Triple B (BBB).

BSE chief executive Thapelo Tsheole informed the Kasane meeting of Africa and Middle East Depositories Association on April 12th, that the BSE, Ministry of Finance and Economic Development, Non-Bank Financial Regulatory Authority and Bank of Botswana are working together on a project to centralise the trading, clearing and settlement of securities at the BSE and Central Securities Depository Botswana.

He said the project involves establishing a single or national CSD for Botswana. At present the custody, clearing and settlement of government bonds is at the central bank (Bank of Botswana) whereas the rest of the BSE listed securities are in the CSDB custody where they clear and settle.

Also, trading of government securities happens through the Bank’s primary dealership system whereas the rest of the listed securities are traded at the BSE. The project intends to defragment and consolidate these platforms. The CSD system has been approved as the basis for establishment of the single CSD for the country.

Tsheole’s election as Chairman of the Committee of SADC Stock Exchanges for the next two years, also coincided with the BSE being nominated the CoSSE Secretariat for the next five years.

Deputy governor of BoB, Andrew Motsomi also observed that “there has been a notable trend and transition from traditional core services of registry, custody and reporting to a more diversified service of products and services which include inter-alia, liquidity management, cross border settlement, collateral management, payments gateways, e-voting, e-IPOs, trade repositories and fund trustee management, securities borrowing and lending.”

Botswana, for the first time ever, hosted the Africa and Middle East Depositories Association meeting, with 28 full members and 8 affiliate members of AMEDA from about 32 countries around the world in attendance, giving much needed impetus to the BSE’s intentions of building a world class securities exchange.

The AMEDA meetings are dedicated towards the review of the association’s financial performance, as well as conducting workshops on the relevant topics that impact the operations of the Central Securities Depositories in the AMEDA region.

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