New roles of central securities depositories hayk voskanyan central depository of armenia
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New roles of central securities depositories Hayk Voskanyan , Central depository of Armenia. Content. Centralized CSD system Pension system, funded pension reforms Other developements. Centralized CSD systems. Full centralization

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New roles of central securities depositories Hayk Voskanyan , Central depository of Armenia

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New roles of central securities depositoriesHayk Voskanyan, Central depository of Armenia


Content

  • Centralized CSD system

  • Pension system, funded pension reforms

  • Other developements


Centralized CSD systems

  • Full centralization

  • All the services are provided to end customers by one entity-CSD

  • Partial centralization

  • Front office services related to issuers and securities owners are outsourced to specialized entities, i.e. banks and investment companies

  • Armenia goes the second way, partial centralization.


Situation in Armenia, preconditions for change

  • Before 2008 registry keeping was centralized to CDA

  • Now registry keeping is done in three entities, one of which CDA and two investment companies,

  • All other functions are centralized in CDA (C&S of exchange trades, ISIN)


Description of new model

  • All registers will be kept in CDA

  • Investment companies and banks will be account and issuer operators, CDA centralized system members

  • CDA will have its new software (DEPEND)

  • All information will be held at CDA system

  • All transactions will be conducted in CDA system


Rationale of the new system

  • Information system, which will comply with

    • international standards of IT security

    • IT and operational risk management standards

  • Equal possibilities for all market participants to serve their clients

  • Competition on the level of account and issuer operators

  • Centralization of fixed costs

  • Cost effectiveness


  • Rationale of the new system 2

    • Centralized response to all to queries sent by state bodies

    • Easiness of regulatory reporting

    • Geographical access (now CDA operates only in Yerevan), which will save time and cost of customers

    • Possibilities for Investment companies and banks to provide full package of services to owners and issuers

    • Possibilities to use the system to enlarge the market e.g. Government Bonds

    • Off course centralization is not good in general, but with proper implementation and regulation we believe we will avoid all disadvantages of centralization.


    Pension system, funded pension reform

    • Started from 2006 design of new mandatory funded pillar

    • Estonian system were used as a benchmark

    • 2010 December, laws passed in the parliament

    • Since April 2011 Armenian Mandatory Pension Information System project has started


    Role of CDA in new pension system

    • Centralized account management

    • Receive information from SRC (tax authority)

    • Selection and exchange of pension funds (from account operators)

    • Unit issue

    • Unit exchange

    • Lump sum payments

    • Programmed withdrawals

    • Centralized custody

    • Safekeeping of pension assets

    • Link to global custodian for foreign assets


    Other developments

    • Links with other CSDs

    • Already have account in Kazakhstan

    • <Depositary and corporate technologies> LLC (Russia) has account in Armenia

    • Plans to expand connections with other countries

    • We are ready to cooperate with all interested parties.


    Thank you!


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