Friday, April 3, 2020

BSEL revises rules for demutualisation

The Botswana Stock Exchange Limited (BSEL) has announced the revision of members’ rules to complement a demutualized environment and drive the company’s strategy.

The BSE Board Chairman Lt. Gen Tebogo Masire stated that the rules will look towards attracting new and different types of members into the market. He also spoke about the introduction of the Settlement Guarantee Fund, which stated that the fund will be used for settlement of defaults of its members.

“Introduction of Securities Borrowing and Lending– SBL, which is a process of temporary lending of securities executed by a lender to a borrower of securities, for a stipulated duration, at a certain fee, will be introduced this year,” said Masire.

Masire is of the view that the introduction of SBL is welcomed as it aims to increase liquidity within the market. He said the rules are currently being drafted and will be submitted to the regulator for approval during the first quarter.

He further stated the BSE is working on the implementation of the new CSD system, adding that the project is underway. He said the new CSD system will have functionality on Securities Borrowing and Lending (SBL), management settlement guarantee fund, identifiers for companies and instrument, IPO processing, AGM including e-voting for listed entities, repo management and online investor access.

“BSE and Bank of Botswana have been working on a number of initiatives which include settling using central bank money as per IOSCO principle and the other project is aimed at centralizing the trading of bonds,” he said.

Masire stated that these projects are aimed at reducing fragmentation presently existing in the bond market and improving and realizing efficiencies and price discovery. He added that BSE expects to make significant progress in the above projects in 2020. He spoke of the expectation that the new, revamped BSE website and mobile app will be both live operational by the beginning of second quarter

He further stated the BSE continues to utilize the ATS for trading and the system has the capability to handle large trades such as P494.3 million in 2016, P484.6 million in 2017, P458.6 million in 2018 and P149.8 million in 2019. He said the system supports our strategy to grow the market and increase the average daily turnover levels to P18.0 million per day by 2021.

“BSE has remained resilient in the midst of subdued global performance where there was generally a downturn in all regions,” said Masire.

The BSE Chairman stated that in a bid to foster growth of both markets, the Zimbabwe Stock Exchange (ZSE) and the BSE, on 16th September, 2019, signed a Memorandum of Understanding (MoU) that will serve as a basis of cooperation between both Exchanges.  He said to supplement this agreement, a joint strategy was formulated between the two partners to provide a framework for cooperation in areas such as product and market development, promotion of cross listings and information.

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