ARRANGEMENT OF SECTIONS

SECTION

PART I
Preliminary

1.        Short title

2.        Interpretation

PART II
Clearance and Settlement Systems

3.        Recognition of clearance and settlement systems

4.        Approval of amendments to constitution and rules of recognised systems

5.        Constitution and rules of recognised system to be open for inspection

6.        Withdrawal of recognition from clearance and settlement system

7.        Establishment and operation of a clearance and settlement system by the Central Bank

8.        Provision of information to Central Bank

9.        Control of undesirable conduct in regard to recognised system

PART III
Finality of Settlements Within Recognised System in the Central Bank System

10.        Finality of payments and transfers made within settlement systems

11.        Payments and transfers within settlement systems not subject to interdict or stay

PART IV
Winding Up, Judicial Management or Curatorship of Participants in Recognised System

12.        Central Bank to be notified of winding-up, judicial management or curatorship

13.        Winding-up or judicial management not to affect finality of prior settlements

14.        Rules, etc., of recognised systems binding on liquidator, judicial manager or curator

15.        Priority of certain instruments on winding-up of participant in recognised systems

PART V
General

16.        Prohibition against unrecognised systems

17.        Prohibition against settlement intermediation

18.        Settlement of disputes arising out of recognised systems or settlement systems

19.        Exercise of functions by Central Bank

20.        Preservation of secrecy

21.        Use of confidential information for personal gain

22.        Evidence

23.        Unpaid items due to insufficient funds

24.        Computer entries

25.        Imaging

26.        Review of Act

27.        Regulations

Act 5, 2003.

An Act to provide for the recognition, operation, regulation and supervision of systems for the clearing of transfer instructions between financial institutions, for the settlement of obligations arising from such clearing, for the discharging of indebtedness arising from such settlements made in such clearing systems and to provide for matters connected with and incidental thereto.

[Date of Commencement: 1st March, 2005]

16.     Prohibition against unrecognised systems

          Any person, financial institution or entity operating or participating in an unrecognised system shall be guilty of an offence and liable to a fine not exceeding P500,000.

17.     Prohibition against settlement intermediation

          (1) Subject to subsection (3), no person other than-

    (a)     a participant in a recognised system or the Central Bank system, acting in accordance with the system's constitution or rules; or

    (b)     a person introduced by a participant in a recognised system or Central Bank system in accordance with a provision of the system's constitution or rules referred to in section 3(3)(d)(v),

shall, as a regular feature of his business, accept a transfer instruction from any other person for the purpose of making a transfer on behalf of that other person to a third person to whom the transfer is due.

          (2) Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding P200 000 or to imprisonment for a period not exceeding 10 year, or to both.

          (3) Subsection (1) shall not apply to-

    (a)     Botswana Savings Bank Act;

    (b)     a building society registered in terms of the Building Societies Act;

    (c)     Botswana Postal Services Act;

    (d)     a person who is acting as the duly appointed agent of the person to whom the payment is due; or

    (e)     any person exempted by the Central Bank in terms of subsection (4).

          (4) The Central Bank may, by notice in the Gazette and other media, exempt any person or class of persons from the provisions of subsection (1), if the Bank is satisfied that such an exemption will be in the public interest and will not cause undue risk to any recognised payment system.

18.     Settlement of disputes arising out of recognised systems or settlement systems

          (1) In this section "business day" means any day other than a Sunday or public holiday.

          (2) If-

    (a)     the management body of a recognised system is aggrieved by any decision taken by the Central Bank for the purposes of this Act, including a decision to withdraw recognition from the system; or

    (b)     any participant in a recognised system or the Central Bank system is aggrieved by-

         (i)       any decision taken by the Central Bank for the purposes of this Act; or

         (ii)       any decision, act or omission by the system's management body or by another participant in the system,

the matter shall be settled in accordance with the provisions of this section.

          (3) The aggrieved party shall provide the Central Bank, the management body or the other participant, as the case may be, with a written statement setting out full particulars of its grievance, and the parties shall thereupon attempt to settle the matter by consensus within seven business days.

          (4) If the parties are unable to settle the matter as contemplated in subsection (3), they may attempt to settle it within a further period of ten business days by a process of mediation whereby-

    (a)     the parties agree on a mediator;

    (b)     the mediator familiarises himself with the parties' respective contentions;

    (c)     the mediator and all parties discuss the matter at one or more meetings attended by them all, and attempt to settle the matter by consensus; and

    (d)     the parties share the mediator's costs equally.

          (5) If the parties are unable to settle the matter by consensus in terms of subsection (3) or by mediation in terms of subsection (4), or if mediation in terms of subsection (4) has been unsuccessful, the matter shall be referred to a single arbitrator, and the Arbitration Act, shall apply in respect of the matter as if the parties had entered into an arbitration agreement contemplated by that Act:

          Provided that the arbitrator shall reach his decision in the matter within one month after his appointment, unless the parties agree to an extension of that period.

          (6) Any decision of an arbitrator on an arbitration in terms of subsection (5) shall be final and binding on the parties.

19.     Exercise of functions by Central Bank

          (1) Any function of the Central Bank under this Act may be carried out on behalf of the Bank-

    (a)     by the Governor of the Central Bank; or

    (b)     subject to the directions of the Governor of the Central Bank, by any Deputy Governor or officer of the Central Bank specified by the Governor.

          (2) The Governor of the Central Bank and any Deputy Governor or officer of the Central Bank specified in terms of paragraph (b) of subsection (1) shall carry out the functions referred to in that subsection in accordance with any general directions of policy that the board of directors of the Central Bank may give them.

          (3) This section shall not be construed as limiting the Central Bank's power under any other law to delegate its functions under this Act to any person.

20.     Preservation of secrecy

          (1) Subject to subsections (2) and (3), no-

    (a)     officer or employee of the Central Bank; or

    (b)     member or employee of a management body,

shall disclose any information which he has acquired in the performance of his functions under this Act or the constitution or rules of any recognised system and which relates to the affairs of a particular financial institution.

          (2) The Central Bank may disclose any information whose disclosure, in the Central Bank's opinion, is reasonably necessary to protect the integrity, effectiveness or security of a recognised payment system or a settlement system.

          (3) Subsection (1) shall not apply to-

    (a)     any disclosure made by the person concerned in the performance of his functions under this Act or under the constitution or rules of any recognised system, or when required to do so by a court or in terms of any other enactment; or

    (b)     the disclosure of information that is generally known to members of the public or a substantial section of the public.

          (4) Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine not exceeding P10 000 or to imprisonment for a term not exceeding one year or to both.

21.     Use of confidential information for personal gain

          (1) Subject to subsection (2), if an officer or employee of the Central Bank or a member or employee of a management body, who for personal gain makes use of any information acquired in the performance of functions under this Act or under the constitution or rules of any recognised system, and which relates to the affairs of a particular financial institution, shall be guilty of an offence and liable to a fine not exceeding P25 000 or double the amount of his gain, whichever is the greater or imprisonment for a period not exceeding five years or to both.

          (2) It shall be a defence to a charge under subsection (1) for the person charged to show that the information used was generally known to members of the public or to a substantial section of the public.

22.     Evidence

          A document purporting to be signed by or on behalf of the Central Bank and stating-

    (a)     that any system is or is not a recognised system; or

    (b)     that any financial institution is or is not a participant in any recognised systems or Central Bank,

shall be admissible in any proceedings in any court on its production by any person, and shall be prima facie proof of the facts stated therein.

23.     Unpaid items due to insufficient funds

          (1) Any person who knowingly draws or issues a cheque, or other payment instrument against which there are no sufficient funds in his account at a financial institution on which the cheque or other payment instrument is drawn shall be guilty of an offence and liable to a fine not exceeding P1500 or 3 months imprisonment or to both.

          (2) The mere fact that the cheque or other payment instrument was returned unpaid with the words "insufficient funds or other words to that effect" shall be prima facieevidence that the drawer had no funds in the account against which the cheque or other payment instrument was drawn and the burden of proof shall lie with the accused person.

24.     Computer entries

          The entries in ledgers, day-books, cash books and other accounts of any financial institution, whether captured manually by handwriting or computerised shall beprima facie evidence of the matters, transactions and accounts therein recorded, on proof being given by the affidavit of one of the directors, managers, or officers of such financial institution or by evidence, that such manual or computerised ledgers, day books, cash books or other account books are or have been the ordinary books of such financial institution and that the said entries have been made in the usual and ordinary course of business, and that such books are in or come immediately from the custody or control of such financial institution.

25.     Imaging

          Photographic images such as film, microfilm, microfiche, or computer images of original documents such as cheques or other payment instruments, securities, certificates of deposits, account ledgers, Bank of Botswana certificates shall be admissible as prima facie evidence of the matters, and or transactions of the original instrument, on proof being given on written affidavit.

26.     Review of Act

          The Central Bank shall establish a committee-

    (a)     to review this Act from time to time; and

    (b)     to make recommendations to the Minister responsible for finance and development planning with regard to amendments to this Act which, in the committee's opinion, have become advisable.

27.     Regulations

          The Minister may make regulations providing for the better carrying out of the provisions of this Act.