Botswana bourse to automate trading

BUSINESS

By John Churu, Gaborone, Botswana

The Botswana Stock Exchange intends to introduce an Automated Trading System (ATS) which it hopes will make the local bourse more visible and create efficiencies in the trading methodology once implemented.

This information was part of its annual report for 2011. The BSE explained that the implementation of ATS was progressing at a rapid rate and is expected to be implemented in Quarter 4 of 2012. “Along with the implementation of the ATS, our CSD system is also being upgraded,” wrote Chairperson, Patrick O’ Flaherty.

According to O’ Flaherty: “The ATS is a major development” for the BSE and “compliments the already established CSD, which will propel the BSE to into the future,” he noted. Adding that “The ATS will make us more visible and help create efficiencies in the trading methodology, which we expect will enhance liquidity.”

BSE implemented the Central Securities Depository (CSD) in 2008 and since the introduction the systematic risk of investing in share market decreased. However, the exchange observed that in order for the CSD to reach its potential, there is a need to engage investors and motivate them to dematerialise their shares.

“A central depository system can only reach its full potential in a 100 percent dematerialised environment,” said O’ Flaherty. “This is the reason that in certain countries dematerialisation is mandated by law or directed to be carried out by the Capital Market Regulator.”

The BSE said that the dematerialisation of share is in the CSD is continuing at a satisfactory pace. By the end of December, 2011, there were more than 12, 800 investor accounts open with 46 percent of all domestic company shares and 91 percent of all foreign company shares being dematerialised. “The BSE also dematerialised its first corporate bond after obtaining approval from Registrar of Companies”. O’ Flaherty added that this has been the experience of many other markets that have implemented the automated trading systems.