National Clearance and Settlement Systems Act, 2003 (No. 5 of 2003)

The National Clearance and Settlement Systems Act, 2003 (Act No. 5 of 2003) is the principal legislation governing payment, clearing and settlement systems in Botswana and the legal foundation for the Bank of Botswana's oversight of the National Payments System. The Act establishes the rules and procedures under which a payment, clearing or settlement system, relating both to payments and to transfers of securities and other financial instruments, is recognised by the Bank of Botswana. It confers on the Bank the function of regulating, overseeing and ensuring the safety and efficiency of these systems, and provides the basis on which the Bank licenses or 'recognises' payment and clearance system operators and monitors Systemically Important Payment Systems (SIPS) for compliance. The Act applies to operators of recognised systems, participants in those systems, and providers of clearing and settlement services. Core obligations include the requirement to obtain recognition from the Bank before operating a payment or settlement system, compliance with conditions attached to recognition, and adherence to the operational and risk-management standards set by the Bank. The Act provides for the legal certainty of settlement, including the protection of settlement finality and the enforceability of netting arrangements within recognised systems, which is essential to limiting systemic risk. It also empowers the Bank to issue regulations, directives and guidelines to give effect to its provisions; the Electronic Payment Services Regulations, 2019 and the Bank of Botswana Electronic Payment Services Licensing Guidelines are made under this framework. The Bank's Payments and Settlement Department administers the Act alongside supporting legislation, including the Banking Act, anti-money-laundering regulations, and the Electronic Communications and Transactions Act. As the umbrella statute, the Act underpins the licensing and supervision of electronic payment service providers, including mobile money operators, in Botswana and remains in force as the central reference instrument for the country's payments and fintech regulation.

1. 1Establishes the legal framework for the recognition, regulation and oversight of payment, clearing and settlement systems by the Bank of Botswana
2. 2Requires operators to obtain recognition from the Bank before operating a payment or settlement system, subject to conditions
3. 3Empowers the Bank to monitor Systemically Important Payment Systems (SIPS) and enforce compliance
4. 4Protects settlement finality and the enforceability of netting arrangements within recognised systems
5. 5Authorises the Bank to issue subsidiary regulations, directives and guidelines (basis for the Electronic Payment Services Regulations, 2019)