Commodity Exchange - Bourse Africa
Financial Technologies of India Group (FTIL) is working with the Botswana IFSC and regulatory authorities in Botswana to establish Bourse Africa, a pan-African commodities and derivative exchange to be headquartered in Botswana. The envisaged commodity exchange will initially trade contracts for cocoa, coffee, cotton maize, gold and African grade crude oil across Africa countries through a hub and spoke model, with the hub electronic trading platform and systems located and housed in Botswana. The promoters will investment over US100mil in the project which is expected to employ over 140 professionals. Bourse Africa is expected to launch early in 2010.
FTIL is an Indian based technology and software provider, listed on the regional Bombay Stock Exchange as well as the National Stock Exchange of India and provides technology to financial services companies including financial exchanges. The company has a track record of establishing exchanges and has played a role in establishing over 10 exchanges including three commodity exchanges, namely, Multi Commodity Exchange of India (MCX); Dubai Gold and Commodity Exchange an the Singapore Mercantile Exchange (SMX). MCX is FTIL’s flagship exchange and (as at end of 2008), it is the 7th largest commodity exchange in the world in terms of volumes of contracts traded, 2nd largest bullion (precious metals) and 3rd largest crude oil exchange again in terms of volumes of contracts traded. MCX controls over 80% of India’s commodity trading market and its strategic shareholders include the now merged NYSE Euronext, Citigroup and Merrill Lynch. Pan African institutional investors will be invited to take an equity stake in the project.
Bourse Africa will be guided by an imminent Board of Advisors that is to be chaired by former President of The Republic of Botswana, Mr. Festus Mogae.
Project Implementation Status
Bourse Africa received a commodity exchange license from the Non-Bank Regulator in September 2008 and successfully accredited as a Botswana IFSC company in October 2008. The Bank of Botswana has issued a conditional certificate of recognition to Bourse Africa for the clearance and settlement aspect of the project’s operations. An Memorandum of Understanding granting Self Regulatory Organisation status was signed with the Non-Bank Regulator during November 2009, to enable Bourse Africa to have supervisory oversight over the members and brokers.
Regulatory Authorities are attending to the last remaining issues such as the modalities of how the exchange surveillance system will be configured and function and the Delivery of a customised trading system is expected in late 2009 from the Indian parent group FTIL and the system will undergo testing in preparation for a live launch early 2010.