Botswana Stock Exchange May 2022 Opening Bell Ceremony: Launch of the Investor Compensation Fund
The Botswana Stock Exchange (BSE) launched the Investor Compensation Fund at the Opening Bell Ceremony this morning May 5, 2022. As the guest of honour, Ms. Motlalepula V. Kabomo, Board Chairperson of the Non-Bank Financial Institutions Regulatory Authority (“the Authority”), extolled this significant milestone for the local stock exchange, which performs the crucial function of facilitating the formation, allocation and mobilisation of capital.
The Authority has regulatory and supervisory oversight of the non-bank financial institutions sector, which includes the capital markets industry, for the purpose of contributing toward the stability of the local financial system. This mandate includes promoting sound and fair business conduct within the Capital Markets industry.
Ms. Kabomo emphasised that investor protection is an important feature of a well functioning market and as such, in an effort to improve the protection available to investors and also fulfill a requirement of the Securities Act, the BSE has developed the Investor Compensation Fund Rules, which have been approved by the Authority and became effective on the April 7, 2022.
The Investor Compensation Fund is a rescue fund for investors, established to grant compensation for financial losses suffered as a result of a market participant’s failure to meet their contractual obligations to investors.
Ms. Kabomo stated that the development of Botswana’s capital markets remains a high priority on the Government’s agenda as a vehicle for attracting foreign direct investment in the form of foreign issuers and investors as well as domestic listings. Ms. Kabomo acknowledged Government’s support, adding that the collective effort in strategic initiatives such as the Investor Compensation Fund paves the way for increased activity at the BSE in terms of increased liquidity, promotion of a diverse investor base, profitability for the Exchange as well as efficient mobilisation of financial resources to support the real economy.
In his opening remarks, Lt. Gen. Tebogo C. Masire, the BSE Board Chairperson highlighted that stock exchanges need to be agile and responsive to global trends and their stakeholders’ needs. He noted that the commencement of the Investor Compensation Fund was testament to this and noted that the development of the Investor Compensation Fund was a joint initiative between the BSE, the Authority and the Ministry of Finance. Lt. Gen Masire concluded his remarks with a brief synopsis of the recent performance of the market.
In his closing remarks, Mr. Oduetse A. Motshidisi stated that the commencement of the Fund was the latest of a number of key development milestones of the local stock exchange since it was created in 1989. These developments have enabled the BSE significant changes that have enhanced the vibrancy and robustness of Botswana’s financial markets and enabled the BSE to be a competitive player in the global capital markets scene. Mr. Motshidisi thanked all key stakeholders who were part of the process for their invaluable contribution.
