Capital Markets

REGULATION AND SUPERVISION OF CAPITAL MARKETS

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The Department is responsible for the regulation and supervision of the following Non-Bank Financial Institutions:

1. Securities Infrastructure Businesses (“SIBs”) which encompass; a) an Exchange b) a Central Security Depository c) a Clearance and Settlement System other than a Central Securities Depository or ; d) a Clearance and Settlement encompassing a Central Counterparty. Currently there are two (2) Securities Infrastructure Businesses supervised by the department; a) The Botswana Stock Exchange (BSE) which operates as a securities exchange b) The Central Securities Depository Company of Botswana (CSDB) which is a 100% subsidiary of the Botswana Stock Exchange

2. Securities Brokers or Dealers which means a member of a securities exchange who; a) carries on the business of purchasing and selling or purchasing listed securities on behalf of other persons b) regularly purchases and sells or purchases or sells listed securities on his own behalf; and c) trades in commodities The department supervises four (4) Stockbrokers in conjunction with the BSE; i) African Alliance Botswana Securities (Pty) Ltd ii) Imara Capital Securities (Pty) Ltd iii) Motswedi Securities (Pty) Ltd iv) Stockbrokers Botswana Ltd

Download Guidelines for The Capital Adequacy Requirements for Custodians

REGULATION AND SUPERVISION OF VIRTUAL ASSETS  

The Regulatory Authority oversees the implementation of provisions of the NBFIRA ACT 2016, Virtual Assets Act 2022 and Regulations. The Act mandates the Regulatory Authority to regulate and supervise the sale and trade of virtual assets, licensing of virtual asset service providers and issuers of initial token offerings, and to provide for matters connected, incidental and related thereto.

Definition of Virtual Assets

Virtual Assets are a digital representation of value that may be digitally traded or transferred, and may be used for payment or investment purposes, or is distributed through a distributed ledger technology where value is embedded or in which there is a contractual right of use and includes virtual tokens. Virtual Assets exclude:

1. a digital representation of legal tender as provided for under the Bank of Botswana Act, and
2. securities and other financial assets that are regulated under the Securities Act;

Licensing of Virtual Asset Service Providers and Initial Token Issuers

The following service providers are required by the Virtual Assets Act to be licensed by the Regulatory Authority:

• Virtual Assets Service Provider: means a person who under an agreement, as part of a business, undertakes a virtual asset service on behalf of another person; or a person who is a dealer or is willing to deal, on own account, by buying and selling virtual assets at prices set by that person
• Initial token Issuer: Initial Token Offering means an offer that is made to the public, by an issuer, for the sale of a virtual token in exchange for fiat currency (e.g., Botswana Pula, US Dollar) or another virtual asset. An initial Token Issuer, therefore, is the issuer of an Initial Token Offering.

Following the commencement of the Virtual Assets Act, a transitional period of three (3) months thereafter was given to allow a person who had been carrying on a Virtual Asset Business, to submit an application for a license.

The transitional period ended on May 31, 2022. The Regulatory Authority has sine issued a public notice instructing all unlicensed operators to cease Virtual Asset operations as they are operating illegally until they apply to and are licensed by the Regulatory Authority.  Action shall be taken against those operators who continue with the illegal/ unlicensed operations.

For more information:

• Download Virtual Assets Act 
• Download Virtual Assets Regulations
• Download Licensing Requirements
• See Frequently Asked Questions (FAQs)
• Download Collective Investment Undertakings Act 2021

Benefits of being Licensed

The benefits of being a licensed virtual assets service provider are that your business will be operating legally, adhering to industry laws and will have the credibility and integrity of a regulated entity. This is critical for the protection of consumers, organisational reputation and preserving stakeholder confidence in your business.