As part of its efforts to develop the Botswana Stock Exchange (BSE) into a world class securities exchange, the BSE introduced the Central Securities Depository (CSD) in 2008 to deal with efficient clearing and settlement. The Automated Trading System (ATS), which was later introduced in 2012, was brought forth to complement the CSD by automating the trading of securities on the Exchange. This was to revolutionize the way in which securities are to be traded on the Botswana Stock Exchange. In addition, the implementation of the CSD also paved the way for the elimination of paper certificates and the dematerialization of securities.
The Central Securities Depository Botswana (CSDB) is mandated by the Bank of Botswana (BoB) to operate a clearing settlement system in accordance with the provisions enshrined in the National Clearance and Settlement Systems Act (No. 5 of 2003). Hence, the central bank regulates funds settlement processes whereas NBFIRA is responsible for the securities market processes.
The CSD is a computer system that facilitates the holding of securities in electronic accounts in contrast to paper certificates. The CSD is very similar to a bank and an account in the CSD operates in a similar manner to a bank account.
Comparisons between a bank and the CSD:
|Holds funds in accounts||Holds securities in accounts|
|Transfers funds between accounts on the instruction of the account holder||Transfers securities between accounts on the instruction of the account holder|
|Facilitates transfer without having to handle money||Facilitates transfer of securities without having to handle paper certificates|
|Facilitates the safekeeping of money||Facilitates the safekeeping of securities|
|Gives monthly statement of funds in accounts||Gives monthly statement of securities in the CSD|
Individuals looking to invested in BSE listed securities will not be able to do so without a CSD account.
Prerequisites of Opening a CSD Account:
To open a CSD account, individuals will have to get in touch with any one of the four (4) licensed Brokers. Brokers are licensed agents given authorization to buy and sell listed securities on behalf of investors. In addition, the Brokers also provide financial advice on which stock or listed security one can invest in.
The four (4) licensed Brokers are:
|Motswedi Securities||(+267) firstname.lastname@example.org|
|African Alliance Securities Botswana||(+267) email@example.com|
|Stockbrokers Botswana||(+267) firstname.lastname@example.org|
|Imara Capital Securities||(+267) email@example.com|
However, please note that prior to account opening, individuals/companies will be required to provide certain documentation. The table below outlines all the necessary documents required to open a CSD Account:
|Copy of ID/ Copy of Valid Passport||Copy of the certificate of incorporation & Copies of ID / Passport of the Directors|
|Proof of Residence (Utility Bill/Lease Agreement/Affidavit)||Proof of Address (Utility Bill/Lease Agreement)|
|Proof of income (Payslip and /or Bank Statement||Proof of income (Bank Statement)|
|Constitutions or Resolution/Letter of Consent from the Board of Directors|
These documentations are required by the Brokers as prescribed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) through their “Know Your Customer” (KYC) guidelines which came into effect in July, 2015.