The Botswana Stock Exchange (BSE) recently announced that it will increase transaction fees for its Central Securities Depository (CSD) from the current 0.10 percent to 0.12 percent effective April 2016.
BSE said in a press statement released last week that the increase has been approved by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), adding the transaction fees have not been increased since the launch of the SCD in 2008.
“The cost of providing such a quality service has increased overtime while the fees remained unchanged, which led the bourse’s Board of Directors to approve the increase,” said BSE.
Clients’ investment portfolios are maintained at the CSD, which relieves the clients of the burden of safe keeping their share certificates, ensures security of shares and reduces the possibility of fraud. Furthermore, when investors transact through the CSD they are able to keep track of their investments and receive regular updates on the number of shares they own and dividends due. With regards to the share sale of Botswana Telecommunications Corporation Limited (BTCL), the application forms also provide information on the CSD and allow potential investors to select their own stock brokers who will either buy or sell shares on their behalf. Stockbrokers then charge investors a commission for executing orders. The BSE recognises four stockbrokers namely Stock Brokers Botswana, Imara Capital, Motswedi Securities and African Alliance.
When submitting the potential investors’ applications, the stockbroker will then open a CSD account on their behalf. However, if potential investors already have CSD accounts they will not need to open a new one. Stockbrokers charge commission based among other things on the CSD transaction fees, which thereby implies that the increased cost may be passed on to investors.