CSD launches improved securities settlement system in January
The Central Securities Depository (Gh) Limited (CSD) has successfully merged the two platforms that were used to settle transactions done in debt and equity onto a common platform.
Advertisement
The merger makes it possible for the depository to interface with the two systems - the Automated Trading System (ATS) of the Ghana Stock Exchange (GSE) and the Ghana Interbank Settlement System (GIS) of the Bank of Ghana (BoG).
A press statement from the CSD said Go-Live on the new platform will be on Monday, January 4, 2016.
"The Go-Live involves the migration of all depository accounts for both debt and equity onto the new platform and the interface of the new system with the ATS of the GSE and the GIS of the BoG," the statement said.
The depository thus encouraged investors to consolidate their investments with their brokers into a single account.
It explained that "the new platform deploys the modern depository architecture developed by Millennium Information Technologies of the London Stock Exchange Group.
It said the upgrade of the system would make it possible for the depository to maintain a single account for each investor for all asset classes following the merger of the equity and the debt.
It is also in response to the need for a more modern state of the art platform that will meet the needs of a growing market, the statement said.
"Also, there is the requirement for a platform that would facilitate the introduction of more products onto the Ghana market such as securities borrowing and lending, " it said.
Below is the full statement from the CSD, which was established last year following the successful merger of the BoG and GSE depositories at the time.
CSD SYSTEM UPGRADE
The Central Securities Depository (GH) Ltd (CSD) wishes to inform its members, investors and the general public that its new platform will be launched on Monday January 4, 2016.
The Go-Live involves the migration of all depository accounts for both debt and equity onto the new platform and the interface of the new system with the Automated Trading System of the Ghana Stock Exchange (GSE) and the Ghana Interbank Settlement System (GIS) of Bank of Ghana.
The new platform deploys the modern depository architecture developed by Millennium Information Technologies (MIT) of the London Stock Exchange Group.
Objectives of the Upgrade
- The main driver for the upgrade is the need to install a common platform to maintain a single account for each investor for all asset classes following the merger of the GSE Depository (equity) and the Central Securities Depository (Debt) in January 2014.
- The other overriding factor is the need for a more modern state of the art infrastructure that will meet the needs of a growing market.
- Also there is the requirement for a platform that would facilitate the introduction of more products onto the Ghana market (such as securities borrowing and lending).
Features of the New Platform
- The new platform is a Generation 7 Product launched by MIT in 2013
- It is web based and can interface to all stakeholders
- It ensures fast and secure transaction processing for registry, depository and clearing and settlement functions.
- It features enhanced flexibility throughout the system with parameterized functionalities.
- It provides real time integration with trading systems and settlement banks.
- It facilitates the full life cycle of various corporate actions.
- Its collateral management capabilities accept cash and physical collateral and facilitates exposure calculations to maintain available trading limit that are communicated to the trading system every trading day.
- It’s clearing and settlement function supports trade reporting, exposure management, failure management and settlement. It also supports the various BIS settlement models, DVP I, DVP II and DVP III. Its failure management supports Stock Lending and Borrowing and Repo.
Expected Changes in the CSD System resulting from the Installation of the New Platform
- All investments in securities (money market, notes, bonds and equity) will be maintained in a single investor account at the Depository. Investors are encouraged to visit their brokers to consolidate their investments into a single account.
- All existing ISINs for both debt and equity will be maintained in the new system.
- Settlement of all transactions will be effected through the central bank, Bank of Ghana as the Settlement Bank. Settlement will be done in BIS model II (cash net, securities gross) through the SWIFT network interface.
- Settlement cycle will continue to be as follows:
- T+2 for debt instruments
- T+3 for equity
- Trades done by brokers for custodian clients will settle directly on the custodian clients’ accounts.
- Depository Participants will be required to upload the relevant KYC documents electronically into the system. This will be approved by CSD before accounts are available for transactions.
- All confirmed trades and transactions that are not settled before the Go Live date will be smoothly carried over into the new regime and will settle in the new system as if nothing has changed.