The Botswana Stock Exchange on Friday joined other exchanges in the continent when it shifted from the manual trading system to the modern platform that will improve efficiency in buying and selling securities.
The new electronic trading system, or the Automated Trading System, replaces the floor system or the open cry method and it is expected to make the BSE more visible and will create efficiencies in the methods of trading.
The stock exchange, headed by Hiran Mendis, stated on its annual report for 2011 that the ATS is a major development for the local bourse and compliments the already established CSD, which will propel the BSE into the future. ?
CSD or the Central Securities Depository was implemented in 2008 and since its introduction the systematic risk of investing in share market decreased.
?“The ATS will make us more visible and help create efficiencies in the trading methodology, which we expect will enhance liquidity.”
In a circular to market participants, the stock market said the new trading platform will offer the market an up-to-date and more efficient trading platform.
The BSE has also upgraded the Central Securities Depository System ICSDJ to enable the two systems, ATS and CSD, to be integrated.
As a result of the transition from manual trading system to the ATS, the BSE declared Thursday a trading holiday and Friday a settlement holiday, respectively.
The holidays were declared to allow for all the necessary systems to be put in place for ‘go live’.
This means that trades that should have settled on the 24 August 2012 will now settle on the 27 August 2072. Thereafter, settlement of trades will continue as normal.
Galane Gold on Wednesday became the last company to list on the BSE under the manual system.
However, the exchange observed that in order for the CSD to reach its potential, there is a need to engage investors and motivate them to dematerialise their shares.??“A central depository system can only reach its full potential in a 100 percent dematerialised environment.”??“This is the reason that in certain countries dematerialisation is mandated by law or directed to be carried out by the Capital Market Regulator,” it added.??However, the BSE said on its annual report that the dematerialisation of share in the CSD is continuing at a satisfactory pace. ??By the end of December 2011 there were more than 12, 800 investor accounts open with 46 percent of all domestic company shares and 91 percent of all foreign company shares being dematerialised.??“The BSE also dematerialised its first corporate bond after obtaining approval from Registrar of Companies.”