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About CSDB

Central Securities Depository Botswana (CSDB)

As part of its efforts to develop the Botswana Stock Exchange (BSE) into a world class securities exchange, the BSE introduced the Central Securities Depository (CSD) in 2008 to deal with efficient clearing and settlement. The Automated Trading System (ATS), which was later introduced in 2012, was brought forth to complement the CSD by automating the trading of securities on the Exchange. This was to revolutionize the way in which securities are to be traded on the Botswana Stock Exchange. In addition, the implementation of the CSD also paved the way for the elimination of paper certificates and the dematerialization of securities.  

The Central Securities Depository Botswana (CSDB) is mandated by the Bank of Botswana (BoB) to operate a clearing settlement system in accordance with the provisions enshrined in the National Clearance and Settlement Systems Act (No. 5 of 2003). Hence, the central bank regulates funds settlement processes whereas NBFIRA is responsible for the securities market processes.

CSD:

The CSD is a computer system that facilitates the holding of securities in electronic accounts in contrast to paper certificates. The CSD is very similar to a bank and an account in the CSD operates in a similar manner to a bank account.

Comparisons between a bank and the CSD: 

Bank Depository
Holds funds in accounts Holds securities in accounts
Transfers funds between accounts on the instruction of the account holder Transfers securities between accounts on the instruction of the account holder
Facilitates transfer without having to handle money Facilitates transfer of securities without having to handle paper certificates
Facilitates the safekeeping of money Facilitates the safekeeping of securities
Gives monthly statement of funds in accounts Gives monthly statement of securities in the CSD

Individuals looking to invested in BSE listed securities will not be able to do so without a CSD account.

Prerequisites of Opening a CSD Account:  
To open a CSD account, individuals will have to get in touch with any one of the four (4) licensed Brokers. Brokers are licensed agents given authorization to buy and sell listed securities on behalf of investors. In addition, the Brokers also provide financial advice on which stock or listed security one can invest in. 
The four (4) licensed Brokers are:

Broker: Tel: E-mail:
Motswedi Securities (+267) 3188627 motswedi@motswedi.co.bw
African Alliance Securities Botswana (+267) 3188958 info@africanalliance.com
Stockbrokers Botswana (+267) 3957900 info@sbb.bw
Imara Capital Securities (+267) 3188886 enquiriesbots@imara.com

However, please note that prior to account opening, individuals/companies will be required to provide certain documentation. The table below outlines all the necessary documents required to open a CSD Account:  

Individual Body Corporate
Copy of ID/ Copy of Valid Passport Copy of the certificate of incorporation & Copies of ID / Passport of the Directors
Proof of Residence (Utility Bill/Lease Agreement/Affidavit) Proof of Address (Utility Bill/Lease Agreement)
Proof of income (Payslip and /or Bank Statement Proof of income (Bank Statement)
Constitutions or Resolution/Letter of Consent from the Board of Directors

These documentations are required by the Brokers as prescribed by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) through their “Know Your Customer” (KYC) guidelines which came into effect in July, 2015. 

CSD Statements: 
The CSD periodically sends statements to clients every six (6) months, through post mail, to inform them of their current holdings. However, information held in the CSD such as clients’ e-mail addresses, allows the CSD to send monthly statements if a client included that information in their CSD account-opening form. Therefore, clients are encouraged are encouraged to keep updating their information with the CSD or their Broker. 

Frequently Asked Questions (FAQs):

Why should I open a securities account?
You need to open a CSD account for the following reasons:

  • If you do not have a CSD account, you will not be able to purchase securities on the BSE.
  • Purchasing securities – Your CSD account will be credited when you purchase securities. 
  • Selling securities – Your CSD account will require to be debited when you sell securities.
What do I get when I open an account?
You will obtain from your broker or custodian Bank a CSD account number together with a duplicate copy of the account opening form that you have completed for your records. 
Can I open a joint account?
If required you can open joint accounts; it is similar to opening joint accounts in a bank.
Can I open multiple accounts, i.e. with more than one participant?
Yes, you can open accounts with several participants if you so wish.
How do I convert the paper certificates I hold into electronic form, i.e. credit my CSD account?
The process of converting paper certificates into electronic form and crediting your CSD account is known as a “dematerialization”.

You need to complete a deposit form (available with your Broker) and submit the same together with the relevant certificates to your Broker. Your Broker will retain the original and return the duplicate form to you. You are requested to retain the duplicate copy of the paper certificate handed over to the participant along with the duplicate copy of the deposit form for your records.

Your Broker will forward the original documents to the transfer secretary of the company. The transfer secretary will authenticate the certificate i.e. check as to whether the document is genuine and if so, deposit your securities in the CSD.

From the point of the deposit your CSD account will show a credit balance in respect of the securities deposited.

What are the benefits of the CSD?
  • Paper certificates could be misplaced, lost, stolen, damaged by water or fire. It is not so with securities in the CSD. Adequate back up facilities ensure that securities accounts can be retrieved if lost. 
  • Securities in the CSD can be sold at anytime and hence trading will be faster.
  • A CSD eliminates the risk of fake certificates since only those certificates authenticated by the transfer secretary will be deposited.
  • A CSD also reduces the paper work involved in a trading of securities.
  • A CSD enhances service delivery and quality through improved operational efficiencies
  • CSD enables qualitative analysis and enhanced information delivery that is useful for investment decision making
When I purchase or sell securities how do I know my account has been credited or debited on the sale of the securities?
The brokers contract note confirming the purchase or sale followed by a monthly statement at the end of the month detailing your transactions and holdings.
Is it possible to close an account with one broker and transfer the securities to another broker?
Yes it is you complete an intra account transfer form, subject to having made payment for the securities.
How long does settlement of transactions take?
Shares purchased will be credited to the CSD account on settlement day which is transaction day plus 3 working days (T + 3) i.e. if you purchase shares on Monday, they will be credited to your account on Thursday, subject to payment being made for the same.

If you sell shares, payment will be made to you on settlement cycle by the Broker.

How safe are my securities in the CSD?
The CSD runs a on highly secure environment that uses several layers of security;

  • It is built on the best breed/known technology which is widely used in banks, telecommunications, insurance, etc. around the globe.
  • Because it runs on both UNIX environment and Oracle Databases, only users who have been authenticated with a user id and password have access. Furthermore, different profiles, defining what access level each user has are normally applied so that users only have access to necessary functions for their jobs. All the transactions on the CSD system are logged in a restricted access file and the system is backed up regularly.
  • The environment is also secured by restricted access to the computer room, using security devices such as firewall to prevent unauthorized access to the network on which the CSD operate.
  • There is also built-in fault tolerance to ensure data and information security against damage, accidental deletion, sabotage etc.
Where can I get more information about the CSD?
 Please feel free to contact/visit the Botswana Stock Exchange at www.bse.co.bw 

4th Floor, Fairscape Precinct, Plot 70667
Fairgrounds | Private Bag 00417, Gaborone, Botswana
Tel: +267 367 4400 | Fax: +267 318 0175
Email: info@bse.co.bw | Web: www.bse.co.bw

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