DEMATERIALISATION OF SECURITIES NOT COMPLETE

MBABANE – The dematerialisation process initiated by ESE has not been completed, which has led to some investors falling to sell their shares.

Electronic trading commenced late last year for Eswatini Stock Exchange (ESE) and only securities that have been transferred and registered at the Central Bank of Eswatini (CBE) Central Securities Depository (CSD) will be traded in the Automated Trading System (ATS). This was mentioned by ESE’s Chief Executive Officer (CEO) Ncamiso Ntshalintshali.
Ntshalintshali said after the implementation of the systems, all new Initial Public Offerings (IPOs) and subsequent trading would be made in the CSD and the ATS, respectively. He said the CSD was commencing the dematerialisation process of the existing paper certificates and therefore, required that shareholders open investor accounts and dematerialise their securities in preparation for the trading of electronic based securities, following implementation of the systems. “Current shareholders are consequently required to contact a registered stockbroker, custodian bank or transfer secretary to dematerialise their stock holdings. Stockholders will be required to complete a stock holding declaration and consent to dematerialise form upon presentation of the physical certificates; a signed and stamped copy of the form will be provided to the holder,” he added.

Process

The CEO also mentioned that the dematerialisation process would run from August 1, 2022 until February 29, 2024 as enshrined in section 116 of the Securities Act, 2010. He said this follows completion of all technical and operational processes, approval of the ESE rules by the Financial Services Regulatory Authority (FSRA) and the publication of Dematerialisation Notice 269 of 2022. When asked what an ATS was, Ntshalintshali said that it was an electronic platform offered by ESE for the purchase and sale of securities (shares, bonds, debentures and so on). He said the ATS has an order matching engine and replaces the manual trading of shares that they have all been used to in Eswatini. “The ATS electronically matches and executes ‘buy’ and ‘sell’ orders that stockbrokers would have brought into the system, for both buying and selling clients to get the best bargains available on the market for their shares.
“It is different from manual trading in that there is no human intervention in the processes of matching orders,” he added.

Transparency

The CEO also mentioned that ATS ensured transparency in share dealings, speed of execution and convenience as it eliminates human interference and traders can do business from anywhere without necessarily having to attend ‘call-over’ sessions at the ESE. He added that ESE and FSRA can also monitor trading activities of stockbrokers for the benefit of the investing public. Ntshalintshali alluded that ESE wants to tap into opportunities to be availed by the Southern African Development Community (SADC) Interconnectivity Hub Project and the African Exchanges Linkage Project, both funded by the African Development Bank (AfDB) which bode well for regional and continental integration and financial inclusion.

Access

“Initially, the investing public will access trading information through their Stockbrokers. However, investors can now download the ESE mobile trading app on play store or visit the ESE website for 15 minutes delayed trading information on the ATS, which is free of charge. Real time data is available at a subscription,” he added. The CEO mentioned that Investors would be able to place orders with stockbrokers as has always been the case. Future developments may allow certain classes of investors to have broker-sponsored investor terminals which give them access to the system for order placement purposes.

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