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| Latest News |
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CSDI Annual GA for the year ended March 20, 2010
CSDI opened its English website
CSDI held its Annual General Meetings
Signing MoU between CSDI and Takasbank
A brief look at Central Securities Depository of Iran (CSDI) activities
 General Information |
To form a functional market which is a prerequisite for an intrinsic and permanent development of every economy not only needs a Framework of supervision but also demands the activities of different financial institutions in which, beside aiding the shareholders, guarantees the fairness and transparency of market also increases the public belief. Central Securities Depository of Iran is a foundation which plays an important role in the efficiency of Securities Market through minimizing the cost of trades, risk of damage, loss, forgeries and increasing the efficiency of clearing and settlement of trades.
Registration and custody of securities in a dematerialized form and transferring the ownership of securities based on DVP system are the main goals of each Central Depository System. The clearing and settlement of securities in the dematerialized form not only reduces the cost of issuing certificate but also reduces risk of forgery, theft, loss, and enables us to perform trade transactions more efficiently. DVP system also minimizes the risk of default in clearing and settlement procedures. Other services provided by CSDI are as follows:
- Establishing a developed system of book-entry, Depository, Settlement & Clearing
- Implementation of a unique clearing and settlement system to comply with the recommendations made by the (G30, ISSA)
- Reducing the cost of trade transactions by simplifying the system of ownership transference
- Reducing risk of clearing and settlement through electronic book-entry.
- Providing a suitable ground to increase market trade volume
- Handling corporate actions (dividend, bonus share, right issues, etc) efficiently in case of signing contract
- To reinforce clients belief through improving the efficiency of settlement & granting information more transparently
- Preparing possibility of reciprocal cooperation with Global Markets
- Establishing a pervasive data base for securities and shareholders
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| Brief History |
Under the paragraph 7 article 1 of the securities market law of Islamic Republic of Iran, in relation with registration, custody and transfer of securities ownership also the clearing and settlement of securities the Central Securities Depository (CSD) was established .also under the paragraph 5 article 4 of the same law, the high council of stock exchange remises to CSDI's activities. In this direction and with the knowledge of prediction of IRI laws and regulations on the draft of securities market laws, activities for CSDI establishment started. On 1st October 2005 after the identification of founders was cleared and subscriptions of bank script on capital funds was paid, the permission for company activities was issued. The election of board of Directors, managing director and registration of company implemented after the approval of provisions; and company became functional under newspaper bulletin and registration no.262549 on 26, December 2005
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| Ownership and Governance |
Under the CSDI articles of association, the company shall be directed by a Board of Directors consist of five people among the shareholders which shall be appointed by the general assembly or founders for a period of two years ,members of the board are as bellow,
Securities and Exchange Organization
Bank Melli Iran
Mofid Securities Co.
Securities and Exchange News Agency
Tehran Securities Exchange Technology Management Co. |
| Regulatory Environment |
CSDI is a public joint stock company which is owned by public & private sectors, banks & brokers and Securities and Exchange Organization. Decisions made in general meeting shall be valid upon the approval of Securities and Exchange Organization also the annual and extraordinary general meeting shall be convened by the presence of SEO delegate as an observer
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| Participants |
The capital of the company is equal to sum of 100 billion Rials, which is divided to 100 million registered common shares of 1000Rials each, the whole of which has been paid in cash. The latest shareholders of company as on April 2008 and the percentage of their shares classified as follows:
Securities and Exchange Organization 30.3%
Tehran Stock Exchange Co. 5%
Brokerage firms 19.2%
Banks 33%
Other entities (mostly investment companies) 12.5%
All five Million preferred shares of CSDI are owned by Securities Exchange Organization
Its privilege is having 10 Times more power than common shares on electing of the Board of Directors. |
| Services Provided |
1- Registering , encoding, custody, clearing and settlement of trade transactions on Tehran Stock Exchange Companies
2- Depositing different kinds of securities in company’s operating system
3- Pledging Securities and releasing of pledge
4- Preparing and presenting the latest essential information for shareholders and brokers
5- Applying suitable electronic methods and tools in clearing and settlement
6- Handling corporate actions such as registration of member companies shareholders ,preparing their necessary information ,holding annual general meeting for corporations and inform their clients ,handling activities like dividend , bonus share ,right issues and etc. in case of signing contract with member companies.
7- Clearing and settlement of trades on DvP2 basis
8- Division of shares among the heirs in case of shareholder death
9- Cooperating with other exchanges around the world
10- Performing other activities based on the laws
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| Eligible Securities |
At the time, the shares of listed companies as well as listed corporate bonds are traded in the Stock Exchange. However CSDI plans to introduce new financial instruments in near future.
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| Form of Securities |
Securities are held in certificate of ownership form and are transferred via electronic book-entry; the certificates are issued to the buyers, one day after the trade is executed.
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| Depository Procedures |
The certificates issued by member companies are required to be deposited at CSDI depository department to be capable for electronic trade transactions at Stock Exchange.
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| Principles of Clearing & Settlement |
- Centralizing clearing & settlement
- Electronic book entry of clearing &settlement
- Netting system on settlement of funds
- Strict confidentiality and maximum security for system users
- Planning to establish guarantee fund for settlement activities
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| Settlement Cycle |
The settlement of funds for share and corporate bonds takes place on T+3 and the clearing of documents on both instruments take place on T+1
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| Clearing & Settlement Procedures |
Trade session at TSE start from 9.00 AM to 12.30 PM from Saturday to Wednesday (Thursday and Friday is weekend holidays )the brokers are able to fulfill their customer obligation by transferring the shares under their code ( each shareholders also have a code which will be specify by this code ) brokers also can transfer the securities after the trade session up to 6.00 PM of same day to their clients code (called group purchasing program ) this program enable them to buy their intended shares through entry their designated code and be in position to submit the purchasing shares to their clients at the same day , the program would speed up the process and facilitate the operation of the brokers . day after the trade T+1 , CSDI depository start printing the ownership certificates for new shareholders and by 12.00 AM on next day these certificates will transfer to brokers to be handed to their clients ,if a shareholder sale part of its share CSDI will obtain two different certificate on next day , one for buyers the other as rest of selling party shares , no later than T+1 the procedure of settlement of document take place and CSDI generate reports to each TSE member companies regarding all their activities and details of transactions on their shares on daily basis . |
| Cash Settlement |
As mentioned above at the end of each trading day CSDI generate report of all trade details take place between members at TSE , after receiving the report Base on daily balance of net trade (debt – credit ) between member brokers and clearing house the process of settlement start , members with net payable to CSDI should deliver the amount by 10.00 AM on third day of trading and the other member party receives his amount by 1.00 PM on same day , however CSDI settle all trades on daily basis and on T+3, basic brokers act on behalf of their agent in different cities for settlement purpose with clearing house.
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| Default Procedures for Clearing and Settlement |
CSDI doesn't have a Guarantee fund for delay or failure of payments by member brokers; however this problem happened very seldom and was solved by CSDI and brokers in a good manner. However we are studying to obtain a system of guarantee fund and communicate with FEAS members on this matter.
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| International Services & Relations |
CSDI is a member of FEAS and also in compliance with the G30 recommendations which provide an important benchmark for quality of securities services in individual markets. Being in compliance with the recommendations of G30 is important for us. We are also trying to have close relationship with other CSDs in different countries. |
| Use of Technology |
CSDI has made agreement with Atos European Market Solution to implement a more efficient Post-Trade system in near future; the project is called Syn~Clear manufactured by Coexis Company.
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