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BSE transformation in the offing

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African Development Bank(AFDB) had cited an underdeveloped capital market as a hindrance to achieving Botswana’s development goals. In pursuit of an improved capital market Botswana’s2009-2013 seeks to enact a Securities Act to transform the BotswanaStock Exchange (BSE) from a statutory body to a company. The country’s share market was set up in 1989 and became BSE, governed by the Botswana Stock Exchange Act,in 1995.The Gazette Business understands that a committee appointed by the Ministry of Finance and Development Planning to review the draft Securities Bill has completed the process.

 

The draft Bill is said to be before the Attorney General’s Chambers which is currently processing it for presentation to Parliament by the Minister.Responding to Gazette Business BSE’s Product Development Manager,Thapelo Tsheole, said the BSE is prepared for the Bill given that its strategy takes into consideration developments that will transform the BSE into a company. He said the BSE strategy contains developmental strategic options to take advantage of the transformation.“At present the BSE is structured as association of brokers.

 

The transformation of the BSE into a corporate will enable the Exchange to better serve the needs of its stakeholders. Further, the governance structure of the BSE could be formulated to represent a wider section of stakeholders. Transforming the BSE into a company will necessitate the Exchange being adequately capitalised to perform the functions of a “for profit” organisation,” he added.

 

He said this would entail broadening of the scope of activities of the BSE from a business model point of view. According to Tsheole, the culmination of this process will be the listing of the BSE itself on the BSE.Responding to Gazette Business request, the Ministry said the corporatisation of the BSE will enable them to offer a wider range of investment options and a more flexible shareholder structure than is currently possible as a statutoryentity.“The major consideration will be the ownership and therefore, capitalisation of the BSE. Corporatisation will allow greater flexibility in the shareholding and more opportunities for expanded product offerings,”said Tshwaragano Mmereki,Ministry’s Principal Public Relations Officer.

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