12 Apr 2018

Bank of Botswana (BOB) deputy governor, Mr Andrew Motsomi has commended the Africa and Middle East Depositories Association (AMEDA) for playing a pivotal role in addressing systemic risk, particularly in the context of the lessons drawn from the global financial crisis.

Officially opening the 27^th AMEDA meeting Wednesday, Mr Motsomi said securities depositories played a critical role in mitigating and managing systemic risk as well as promoting stability and integrity of financial markets both on the domestic front and across the world.

He said it was encouraging that forums such as AMEDA contributed to the broader mandates of the global alliances. He noted that the International Monetary Fund (IMF), Financial Stability Board (FSB) and the Bank for International Settlement (BIS) as well as central banks and other prudential supervisors were continually embarking on initiatives to improve the understanding of systemic risk and strengthening their ability to detect it as well as devising mitigation tools.

Mr Motsomi said in Botswana, BOB was mandated to conduct the oversight function of payments and settlements systems in the country to minimise and control systemic risks and purse technological and institutional advancements to modernise the national payment system. He said the introduction of the Central Securities Depository Company of Botswana (CSDB) by the Botswana Stock Exchange (BSE) and government in 2008 marked a critical milestone in the evolution of the national payment system.

“The CSD system has significantly transformed the operations of the capital markets in the country, by inter-alia, improving the safety of investor assets, improving the efficiencies and the integrity of securities market transactions as well as contributing to the minimisation and mitigation of systemic risk,” he said.

Undertakings by the CSBD, he said continued to be well received by international investors as indicated by the consistency of the foreign investor participation in the local securities market.

 Furthermore, he said the International Organisation of Securities Commission (IOSCO) encouraged authorities and supervisory bodies to adopt Principles for Financial Market Infrastructures (PFMIs).

He said AMEDA remained a robust and viable soundboard for CSDs within Africa and the Middle East region in promoting cooperation at the regional and international level.

He added that AMEDA had over the years provided a peer to peer learning platform for members and service providers to interact and deliberate on issues pertinent to their development and mandates within their respective capital markets.

On BSE developments and financial markets in Botswana, BSE chief executive officer, Mr Thapelo Tsheole said his organisation had been inactive in regional organisations and was just elected the SADC stock exchange chairperson last month. Mr Tsheole said at the end of 2017, CSDB achieved a 100 per cent dematerialisation which was the conversion of physical records of investments into electronic. He said Botswana completed a Business Continuity Policy in 2017. Furthermore, he said BSE continued to work with Non-Bank Institutions Financial Regulatory Authority (NBIFRA) and BOB to centralise trading and clearing of securities because having two CSDs was not ideal.

Mr Tsheole said another development was that at the end of 2017, Botswana managed to realise the super national bond and the first ever dollar-dominated bond.

 He further said BSE would continue with outreach activities to teach the public about dematerialisation as a way of trying to encourage the population to be stakeholders in the economy.

At the same meeting, Tanzania and Zambia were welcomed as new AMEDA members and Korea Securities Depository (KSD) chairperson and CEO, Mr Byung-rhae Lee proposed cooperation between AMEDA and KSD.

AMEDA has 28 full members and eight affiliate members from about 32 countries around the world.

 Its meetings review the association’s financial performance. AMEDA is a non-profit organisation that conducts workshops on relevant topics that impact on the operations of the CSDs in its region.

This was the first time Botswana hosted the association’s meeting since becoming a member in 2012. ENDS