The Central Securities Depository System (CSD) in Botswana has purchased automation technology from consultants based in Mauritius and Sri Lanka. The new system will be adopted by the exchange shortly. The current system is manual. The new CSD will process share and bond certificates, deposits and withdrawal, transfer securities between accounts and record trades. It will also generate settlement reports for participants, settlement banks and clearing banks and transfer securities between accounts of buyers and sellers, and allow brokers to place orders online.
“The advantages of installing the automated CSD includes reducing the risk element that is present in the manual clearing and settlement environment and to improve efficiency, thereby attracting more foreign investors since the settlement and clearing standards used, will be internationally recognised,” says a spokesman for Standard Bank of South Africa in Botswana. “In order for the system to work, it must have constituents that include a CSD organisation that will provide the centralised depository and settlement services for the market as well as a capital market authority, and participants working as a link between investors and CSD. The participants, which include stock broking firms and custodian banks, must meet certain requirements and must have access to CDS system. Participants would also be expected to open and keep securities accounts for their clients in the CSD.”