To invest in the BRVM, some simple rules have to be observed:
Contact an authorized intermediary (SGI, SGO, SGP, etc.);
Open a securities account;
Choose the portfolio management method;
Know the ground rules;
Monitor the news on the securities market;
Invest the money you do not need on a daily basis in the stock market;
Diversify your portfolio without losing focus;
Do not invest above your means;
- Make sure you sometimes collect the unrealized gains of your portfolio.
Contact an authorized intermediary
The function of an authorized financial intermediary is regulated on the regional securities market of the West African Economic and Monetary Union. Those acting presently in this capacity are SGIs, SGOs, SGPs. However, only Brokerage Firms (SGIs, for Sociétés de Gestion et d’Intermédiation) are authorized to trade on the securities listed on the BRVM.
The choice of an authorized intermediary depends on several factors: the range of financial services offered, the closeness with your account manager or portfolio manager, the importance of the information provided, such as periodic analysis (daily, weekly, monthly and semi-annually), regular publications on the listed companies, access to the portfolio and the account holding or management charges.
Opening securities and cash accounts
The opening of an account is done through authorized intermediaries. To open such an account, an agreement and an account opening form have to be signed.
You have to understand the pricing conditions applied.
Each intermediary is free to set their rates, but the rates applied are approved by the Regional Council for Public Savings and Financial Markets (CREPMF), the market’s supervisory Authority.
For each transaction, the stockbroker sends out a “transaction notice”, a document attesting that the order has been executed properly. This document shows the number of securities that have been bought or sold, the price at which the order was executed, the brokerage fees to be paid to the broker, the stock market trading fees due to the BRVM and to the Central Depository/Settlement Bank (DC/BR), and the taxes and net amount of the transaction.
The BRVM operates on a cash based market: the buyer must have liquid cash before making a sale and the seller must have securities before proceeding with sales.
The quarterly statement showing the account’s portfolio valuation, available cash balance and statement of financial transactions – securities and cash – is provided to the investor.
At the end of the year, the broker, upon the request of the investor, provides a statement of the dividends received and the capital gains realized for tax declaration purposes.