Following lengthy campaign by some captains of the capital markets industry over the years that called for a simplified regulation of the securities market in the country, the Botswana Stock Exchange has finally been awarded the Self-Regulatory Organisation (SRO) status.
The development follows the signing of the Order by the Ministry of Finance and Economic Development which gave the BSE the SRO status effective 18 February 2020.
The Finance Ministry’s signing of the Order follows the global trends which showed that securities market development cannot be effective without the timely formation of flexible mechanisms for controlling and regulating the participants’ activities at all levels of the stock market industry which is possible under self-regulation.
In the global space Self-regulatory organisations (SROs) are created by professional securities market participants with the aim of developing and controlling professional ethics standards, protecting the interests of the shareholders and other participants in the stock market industry.
In Botswana, the Chief Executive of BSE – Thapelo Tsheole says the latest development is wholly welcomed as it will increase efficiency of the, local bourse as a market regulator. The move, according to Tsheole will also and make BSE more attractive to investors – both locally and internationally.
“The market operates in a very quick manner and being self-regulatory organization will assist is speeding up daily operations,” says Tsheole.
Under the new arrangement where BSE is an SRO, the expectation is that the local market will experience improved efficiency as they will be no double regulation on Brokers.
Tsheole says the connection between BSE as SRO and its members can also help the local bourse to rapidly identify and respond to new risks to investors and markets.
“SROs usually have more depth and expertise on market operations or practices. They have a keen interest in and a thorough knowledge of their industry and the regulatory framework within which they operate”, says Tsheole.
As there will always be conflict, BSE as an SRO is expected to adhere to distinct processes by which conflicts are handled, as well as ways on how to resolve them.