The failure to meet these contractual obligations may stem from several reasons but the compensation is limited to failures due to dishonesty, insolvency, default, or liquidation of a participant. The fund valued at P28 million approved by Non-Bank Financial Institutions Regulatory Authority (NBFIRA) came into effect on April 7 this year. BSE, Central Securities Depository of Botswana (CSD) participants and so forth, will be required to contribute a sum of P5,000 per annum towards the compensation fund.
According to NBFIRA board chairperson, Motlalepula Kabomo, investor protection is an important feature of a well-functioning market adding that Botswana’s capital market 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. “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 economic growth,” she said All retail investors can prove a legitimate claim, and in order to make a claim, the claimant will be required to submit an application addressed to the Chief Executive Officer of the BSE through the prescribed application form within three years from the date of default.
