Thursday, July 7, 2022

BSE suspends review of Member Rules, work completed on Securities Bill

Botswana Stock Exchange, the local bourse, said the review of the draft Securities Bill has been completed, but work on the BSE Member Rules has been suspended to avoid duplication with other regulators.

BSE annual report for 2010 stated the Committee appointed by Ministry of Finance and Development Planning to review the draft bill has finished work and made a couple of amendments.

“The Securities Bill is expected to be presented to parliament in due course,” said the stock exchange in its annual report.

There have been concerns over the tabling of the bill, which will give regulation a facelift. If passed into law, the act will transform the BSE from being a parastatal into a corporate.

“In effect, this would require the BSE to transform from being a “not for profit” organisation into a company operating as a commercial entity,” the stock report said.

Equally, the governance of the stock exchange will be sufficiently addressed once the Securities Bill becomes law.

However, in the absence of the law, the stock market has already undertaken measures to improve governance. These measures include the adoption of the Board Charter in 2007 and the introduction of non independent non executive Committee members.

The Board Charter came with the realisation that BSE is a regulator with issues like conflict of interest likely to arise. The Board Charter was adopted in 2008 based on the principle of good corporate governance as a ‘way of ensuring that the business of the exchange is conducted in a responsible and ethical manner’.

The Board Charter defines Committee members in terms of whether they are independent or non- independent and whether they are executive or non- executive.

BSE said it has suspended work on the Member Rules after non bank regulator started work on the same.

The exchange took over the review of its Member Rules from the consultants appointed by the Ministry of Finance and Development Planning at the request of the ministry.

BSE has gone through the drafts of the proposed rules, but ‘has decided to suspend further work after having made to understand that NBRIRA are drafting’ Member Rules and are likely to direct the BSE to adopt such rules.

NBRIRA or The Non Bank Financial Institutions Regulatory Authority is a body that regulates all non-banking financial entities registered in Botswana including Pension Funds, Asset Management, Consumer/Micro lending, insurance and Collective Investment Undertakings.

It also safeguards the stability, fairness and efficiency of the non-banking financial sector, and ensures that regulation in the Botswana IFSC is in line with international best practice.

The annual report also pointed out that the BSE’s trading rules will undergo an extensive revision subsequent to the Implementation of the proposed Automated Trading System.

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