Asia Pacific Central Securities Depositories Group Secretariat MCD SCANS newsletter • 1 Contents

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Asia Pacific Central Securities Depositories Group Secretariat MCD SCANS newsletter • 1 Contents Powered By Docstoc
					Asia-Pacific
Central Securities
Depositories Group
Secretariat : MCD   & SCANS




                              newsletter • 1
                                   Contents
                                   ACG MEMBERS                                                                           2
                                   TASK FORCE UPDATE                                                                     3
                                          1. BEST PRACTICE TASK FORCE                                                    3
                                          2. SETTLEMENT RISK MANAGEMENT TASK FORCE                                       3
                                          3. EXCHANGE OF INFORMATION TASK FORCE                                          4
                                          4. CROSS BORDER LINKAGE TASK FORCE                                             5
                                          5. TECHNICAL TASK FORCE                                                        5
                                   NEWS CORNER                                                                           7
                                         1. CENTRAL DEPOSITORY COMPANY OF PAKISTAN LIMITED                               7
                                             NEW CHIEF EXECUTIVE OFFICER                                            7
                                         2. CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED                                  7
                                             A STATUS UPDATE                                                        7
                                             CDSL’S INTERNET-BASED SERVICE                                          7
                                             INSTALLATION OF RP7410 SERVERS                                         8
                                             CDSL REALIGNS ITS TARIFF STRUCTURE                                     8
                                             FIVE MAJOR BANKS BECOME DEPOSITORY PARTICIPANTS OF CDSL                8
                                             NON-RESIDENT INVESTORS GET FACILITY OF TWO-WAY ADR/GDR FUNGIBILITY     8
                                         3. JAPAN SECURITIES DEPOSITORY CENTER, INCORPORATED                             9
                                              JASDEC INC. COMMENCED ITS BUSINESS IN JUNE, 2002                      9
                                              COMMERCIAL PAPERS WILL BE ISSUED IN A DEMATERIALISED FORM             9
                                              A UNIFIED CLEARING ORGANISATION WILL BE OPERATIONAL IN JANUARY 2003   9
 The Balai Nobat, Alor Setar in          4. MALAYSIAN CENTRAL DEPOSITORY SDN BHD AND SECURITIES CLEARING
  the state of Kedah, houses the
sacred instruments of the Royal
                                            AUTOMATED NETWORK SERVICES SDN BHD                                           9
 Orchestra, played during royal              RESTRUCTURING OF MALAYSIAN CENTRAL DEPOSITORY SDN BHD                  9
                    ceremonies.
                                         5. STATE CENTRAL SECURITIES DEPOSITORY OF THE REPUBLIC OF UZBEKISTAN            10
                                              DEVELOPMENT OF LEGISLATIVE AND INFRASTRUCTURE OF THE STOCK MARKET     10




                                                                                                                              newsletter • 2
                                                                               After the Portuguese captured
                                                                               Malacca, they built a fortress to
                                                                               defend their position. Called
                                                                               A’Famosa, all that remains of that
                                                                               structure is the entrance.




ACG Members
  Country                   Depository                            E-mail                   Website
Australia     ASX Settlement and Transfer              angus.richards@asx.com.au   www.asx.com.au
              Corporation Pty Limited
              Austraclear Limited                      ckelly@austraclear.com      www.austraclear.com.au
              SFE Clearing                             dmonk@sfe.com.au            www.sfe.com.au
Bangladesh    Central Depository of Bangladesh         cdbl@bol-online.com         Nil
              Ltd.(CDBL)
China         China Securities Depository and          chuangao@ssccrc.com         www.ssccrc.com
              Clearing Corporation limited                                         www.sse.org.cn
Hong Kong     Hong Kong Securities Clearing            bryanchan@hkex.com.hk       www.hkex.com.hk
              Company Limited
              Hong Kong Monetary Authority             hkma@hkma.gov.hk            www.info.gov.hk/hkma
India         National Securities Clearing             rnarain@nse.co.in           www.nseindia.co.in
              Corporation
              National Securities Depository Limited jsule@nsdl.co.in              www.nsdl.co.in
              Central Depository Services (India) Ltd. hitendrap@cdslindia.com     www.centraldepository.com
Indonesia     Indonesian Central Securities            josef@ksei.co.id            www.ksei.co.id
              Depository (PT KSEI)
              Indonesian Clearing & Guarantee          eddy.sugito@kpei.co.id      www.kpei.co.id
              Corporation (PT KPEI)
Japan         Japan Securities Clearing Corporation k-nishimukai@jscc.co.jp        www.jscc.co.jp
              Japan Securities Depository Center       t-kumakura@jasdec.com       www.jasdec.com
Korea         Korea Securities Depository              goper@ksd.or.kr             www.ksd.or.kr
Malaysia      Malaysian Central Depository Sdn Bhd izham@klse.com.my               www.klse.com.my
              Securities Clearing Automated            zuraiha@klse.com.my         www.klse.com.my
              Network Services Sdn Bhd (SCANS)
New Zealand   Reserve Bank of New Zealand              katzp@rbnz.govt.nz          www.rbnz.govt.nz
Pakistan      Central Depository Company               diwan@cyber.net.pk          www.cdcpak.com
              of Pakistan Limited
Philippines   Philippines Central Depository. Inc.     jerry_arcangel@pcd.com.ph   www.pcd.com.ph
Singapore     The Central Depository (Pte) Limited scd@sgx.com                     www.sgx.com
Sri Lanka     Central Depository Systems (Pvt) Ltd. CSE@sri.lanka.net              www.lanka.net/cse
Taiwan        Taiwan Securities Central Depository e855110@tscd.com.tw             www.tscd.com.tw
              Company Limited
Thailand      Thailand Securities Depository           kongkeaw@set.or.th          www.set.th
              Company Limited
Uzbekistan    The State Central Depository of          yadgarov@deponet.uz         www.deponet.uz
              Securities of the Republic of Uzbekistan




                                                                                                       newsletter • 3
                                                          Kota Darul Ehsan - Erected to
                                                          mark the boundary between
                                                          the state of Selangor and the
                                                          Federal Territory of Kuala
                                                          Lumpur.



Task Force Updates
Best Practice Task Force

Members
• Austraclear Limited, Australia
• National Securities Depository Limited (NSDL), India
• New Zealand Central Securities Depository Limited
• Philippine Central Depository Incorporated
• Securities Clearing Automated Network Services Sdn. Bhd. (SCANS), Malaysia
• The Central Depository (Pte) Limited, Singapore

Convenor
• National Securities Depository Limited (NSDL), India
• Email Contact : jsule@nsdl.co.in

Objective
• Continue to develop best practice guidelines for ACG members.
• Monitor best practice goals and Key Performance Indicators (KPI’s) of members.
• Monitor and disseminate information on fee structures.

Settlement Risk Management Task Force

Members
• Central Depository Company of Pakistan Limited
• Central Depository of Bangladesh Limited (CDBL)
• Central Depository Systems (PvT) Limited, (Sri Lanka)
• Hong Kong Securities Clearing Company Limited
• Korea Securities Depository
• Securities Clearing Automated Network Services Sdn. Bhd. (SCANS), Malaysia
• China Securities Depository and Clearing Corporation Limited
• Taiwan Securities Central Depository Company Limited
• Thailand Securities Depository Company Limited
• National Securities Clearing Corporation, India

Convenor
• Korea Securities Depository
• Email Contact : goper@ksd.or.kr

Objective
• To develop the understanding of risk management practices.
• To examine the impact of new trends on settlement risk management.




                                                                                          newsletter • 4
                                                                                         Istana Jahar - Built in 1887 by
                                                                                         Sultan Mohamad II for his
                                                                                         grandson, Long Kundur, the
                                                                                         Istana Jahar is now a museum
                                                                                         featuring Kelantan’s cultural
                                                                                         heritage.


Exchange of Information Task Force
Members
• Central Depository of Bangladesh Limited (CDBL)
• Indonesian Central Securities Depository (PT KSEI)
• Japan Securities Clearing Corporation
• Japan Securities Depository Center Incorporated
• Malaysian Central Depository Sdn. Bhd.
• National Securities Depository Limited (NSDL), India
• Securities Clearing Automated Network Services Sdn. Bhd. (SCANS), Malaysia

Convenor
• Japan Securities Depository Center Incorporated
• Email Contact : t-kumakura@jasdec.com

Objective
• Promote the facilitation of the exchange of information.
• Promote mutual co-operation amongst ACG members.
• Maintenance of a list of contacts for all ACG members.

Report
Activities of the Exchange of Information Task Force

The 4th ACG Cross-Training Seminar 2002 was successfully held in Mumbai from June 2 to 3, hosted by the
National Securities Depository Limited, India. Over 30 delegates from 15 member CSDs participated in the
seminar this year. Participants made presentations on Risk Management and the services provided by CSDs,
including Straight-Through Processing. With the experience of the September 11 terrorist attacks in the
United States, participating members were very much interested in the disaster recovery plans and
contingency plans other CSDs have adopted, and active discussions were held after the presentations.

On this occasion, the Task Force would like to express our special thanks to NSDL, India for the courtesies
extended to all the participating members.




                                                                                                              newsletter • 5
                             Cross Border Linkage Task Force
                             Members
                             • ASX Settlement and Transfer Corporation Pty Limited , Australia
                             • Austraclear Limited, Australia
                             • Central Depository Company of Pakistan Limited
                             • The Central Depository (Pte) Limited, Singapore
                             • Hong Kong Securities Clearing Company Limited
                             • Indonesian Clearing & Guarantee Corporation (PT KPEI)
                             • Japan Securities Clearing Corporation
                             • Korea Securities Depository
                             • New Zealand Central Securities Depository Limited
                             • Securities Clearing Automated Network Services Sdn. Bhd. (SCANS), Malaysia
                             • The State Central Depository of Securities of the Republic of Uzbekistan
                             • Taiwan Securities Central Depository Company Limited

                             Convenor
                             • Japan Securities Clearing Corporation
Clock Tower, Pesara King     • Email Contact : k-nishimukai@jscc.co.jp
Edward Penang. Towering
60 feet high, the clock
tower was erected to         Objectives
commemorate the Diamond
                             Develop a model of multilateral cross-border linkages based on research of European models and best
Jubilee of Queen Victoria.
                             practices for linkages.


                             Technical Task Force
                             Members
                             • Austraclear Limited, Australia
                             • Central Depository of Bangladesh Limited (CDBL)
                             • Central Depository Company of Pakistan Limited
                             • China Securities Depository and Clearing Corporation Limited
                             • Hong Kong Securities Clearing Company Limited
                             • Malaysian Central Depository Sdn. Bhd
                             • National Securities Depository Limited (NSDL), India
                             • New Zealand Central Securities Depository Limited
                             • Securities Clearing Automated Network Services Sdn. Bhd. (SCANS), Malaysia
                             • Taiwan Securities Central Depository Company Limited
                             • Thailand Securities Depository Company Limited.

                             Convenor
                             • Hong Kong Securities Clearing Company Limited
                             • Email Contact: bryanchan@hkex.com.hk

                             Objective
                             Investigate business proposals in relation to technical issues such as e-commerce and security of system
                             networks.




                                                                                                                                        newsletter • 6
                                                                                       The Terengganu State Museum
                                                                                       Complex consists of a Main Museum,
                                                                                       a Maritime Museum, a Fisheries
                                                                                       Museum, 4 traditional houses as well
                                                                                       as botanic and herb gardens.



News Corner
Central Depository Company of Pakistan Limited
New Chief Executive Officer: After having served the Central Depository Company of Pakistan Limited for more
than six years, Mr. Najam Ali has resigned as Chief Executive Officer of the company. Mr. Najam Ali is replaced
by Mr. Mohammad Hanif Jakhura as the Chief Executive Officer.

Mr. Jakhura has been an integral part of the core management team that implemented the Central Depository
System in Pakistan and has vast experience in depository operations. Prior to becoming the CEO, he has served
as the Company Secretary and Executive Director of the company.

Central Depository Services (India) Limited
A Status Update: As of August 2, 2002, Central Depository Services (India) Limited (CDSL) has 4,463 Issuers
whose securities are admitted in dematerialised form (demat). The spread of live depository services through
Depository Participants of CDSL and their branches has increased to 104 towns and cities. An update of CDSL’s
status under various parameters is mentioned hereunder:

Issuers whose securities are admitted to CDSL (equity)                   4,463
Number of Depository Participants registered                             174
Number of live Depository Participant connections to CDSL*               370
Number of cities/towns having live Depository Participants*              104

* The CDSL system permits branches of a Depository Participant to have on-line connectivity with the CDSL
system, enabling them to provide the same level of service to the investors as the main branch. The branch
which the Depository Participant designates as the main branch can control and monitor the functioning of all
branches, by defining the functions permitted to them, and through a comprehensive reporting system.

CDSL’s Internet-based service: Mr. G. N. Bajpai, Chairman Securities & Exchange Board of India (SEBI),
inaugurated “Electronic Access to Securities Information” (easi) - the Internet services of CDSL on April 22,
2002. “easi” makes available to CDSL system users, the following facilities virtually at their fingertips:
• Getting up-to-date balances of their holdings in their CDSL demat accounts and the status about execution
  of their instructions;
• Getting details of transactions done for the past seven days;
• Getting a statements print-out of their demat accounts;

easi offers a novel facility of providing daily valuation of the stocks held in a demat account. The valuation is
done on the preceding day’s closing price at The Stock Exchange, Mumbai (BSE). This helps investors to plan
their investments and/or trading activities more systematically. easi can be accessed through CDSL’s web site,
www.cdslindia.com. easi has incorporated all necessary security measures to prevent unauthorised access by
using a multi-layered security architecture comprising password, encryption and digital certification.

Installation of rp7410 Servers: CDSL has upgraded its system hardware resources to improve system
performance by deploying state-of-the-art rp7410 servers from M/s Hewlett Packard. These Servers have been
operational since 7th July, 2002. The installation has resulted in a tremendous improvement in overall system
performance and early availability of system for start of operation to users.




                                                                                                               newsletter • 7
                                                             The State Secretariat Building of
                                                             Johor is an imposing structure of
                                                             columns and pillars.


CDSL Realigns Its Tariff Structure: Effective May 1, 2002, CDSL tariff is as follows:
• Debit transactions attract a fee of 0.01% subject to a minimum of Rs. 5/- and maximum of Rs. 12/- per
  transaction.
• Tariff on credit transactions has been abolished.
• As hitherto, there will be no fee for custody.
• No fee for demat and a fee of Rs. 10/- for each certificate to be rematerialised.
• Pledge set-up, removal and invocation at a fee of Rs. 12/- per transaction.

The ability of Depository Participants (DPs) to price their services to investors attractively is in large measure,
dictated by set-up costs, transaction and custody charges they are required to pay to the Depository. CDSL has
always been competitive in this respect and even with the changing market practices, CDSL DPs will continue
to be in a position to give investors an affordable deal.

Five Major Banks Become Depository Participants of CDSL: UTI Bank Limited, IDBI Bank Limited, The Jammu
& Kashmir Bank Limited, The South Indian Bank Limited and Indusind Bank Limited have obtained registration
from SEBI as Depository Participants of CDSL.

Non-Resident Investors Get Facility of Two-Way ADR/GDR Fungibility: The Government of India (GoI) and
Reserve Bank of India (RBI) have been permitting issuance of American Depository Receipts/Global Depository
Receipts (ADR/GDRs) by Indian companies subject to certain conditions. Over the years, the ADR/GDR holding
in some companies has reduced i.e. a portion of the ADRs/GDRs has been redeemed into underlying shares
and sold in the domestic market. The GoI has now permitted the companies the facility of two-way limited
fungibility of ADR/GDRs. These companies are now permitted to replenish their ADRs/GDRs on specific request
from a non-resident investor in such a manner that the sectoral cap on foreign direct investment, if any,
prescribed by RBI is not breached.

In response to this development, the CDSL system now permits opening of special “Depository Receipt” (DR)
accounts in the name of/on behalf of non-resident investors who wish to invest in Indian securities under the
scheme of limited two-way fungibility of ADRs/GDRs. The shares of all Indian companies which have made
equity ADR/GDR issues are admitted in CDSL.




                                                                                                                 newsletter • 8
                                           Japan Securities Depository Center, Inc.
                                           JASDEC Inc. Commenced its Businesses in June, 2002: JASDEC Inc., established in January 2002, raised
                                           additional capital of 6 billion yen in April. The capital amount of JASDEC Inc. is now 4.25 billion yen (paid-in
                                           capital of 8.5 billion yen). In line with the amended CSD Law, which became effective in April 2002, JASDEC Inc.
                                           took over all the JASDEC businesses and started the depository operations on June 17, 2002, upon approval of
                                           the Financial Services Agency and the Minister of Justice. JASDEC was dissolved on the same day.

 Fort Margherita is another building       Commercial Papers will be Issued in a Dematerialized Form: As the Law Concerning Book-Entry Transfer for
      of love, named after the wife of     Short-Term Corporate Bonds, which enables issuers to issue commercial papers (CPs) in a dematerialized form,
  the second White Rajah of the East       has become effective since April 2002. JASDEC Inc. is working on the introduction of book-entry transfer
Malaysian state of Sarawak. The Fort
       commands a breathtaking and         service for CPs by the end of March 2003.
          strategic position along the
                      Sarawak River.       A Unified Clearing Organization will be Operational in January 2003: Japan Securities Dealers Association, Tokyo
                                           Stock Exchange, Inc., Osaka Securities Exchange Co., Nagoya Stock Exchange, Inc., Sapporo Securities
                                           Exchange and Fukuoka Stock Exchange established a unified clearing organization with capital amount of 4
                                           billion yen in July 2002. By establishing this clearing organization, the trades in those markets, currently
                                           provided independently by each marketplace will be streamlined into a single operation at the clearing
                                           organization. In line with the amended Securities and Exchange Law, effective January 2003, the clearing
                                           organization will obtain a license as a clearing entity under the Law and will commence the clearing operations
                                           in January 2003.

                                           Malaysian Central Depository Sdn Bhd and Securities Clearing Automated
                                           Network Services Sdn Bhd
                                           Restructuring of Malaysian Central Depository Sdn Bhd and Securities Clearing Automated Network
                                           Services Sdn Bhd: Effective August 2002, Malaysian Central Depository Sdn Bhd (MCD) and Securities Clearing
                                           Automated Network Services Sdn Bhd (SCANS) have been placed under the Clearing, Settlement and Depository
                                           (CSD) group of Kuala Lumpur Stock Exchange (KLSE). The other company in the group is Malaysian Derivatives
                                           Clearing House Bhd (MDCH). The streamlining of the above companies is to maximise the utilisation of support
                                           services within the CSD group and to better serve the needs of market participants and the industry.

                                           The new structure of MCD and SCANS under the CSD group is as follows:


                                  General Manager, SCANS                                                                     General Manager, MCD
                                    Mohd Ridzal Sheriff                                                                    Fathi Ridzuan Ahmad Fauzi

                                          CEO,MDCH




                                                                                   CORPORATE
                                                      RISK                          AFFAIRS,                FINANCE &
                               CLEARING            MANAGEMENT                        LEGAL &                                             DEPOSITORY
                                                                                                              ADMIN
                                                                                   COMPLIANCE
                                   Head                 Head                        Head                         Head                       Head
                              Lim Lean Beng         Cheah Sin Keat          Azman Shah Md. Yaman          Nadzirah Abd Rashid           Chua Kong Khai
                           Centralised Clearing & Settlement Resources              Shared Centralised Support Resources


                                                                                                                                                       newsletter • 9
State Central Securities Depository of the Republic of Uzbekistan
Development of State Central Securities Depository of the Republic of Uzbekistan. In order to keep records
of all securities issuers operating on the territory of the Republic of Uzbekistan, and to take stock of, register
and keep the securities, the National Depository “Vaqt” was established in 1994.

After the issuance of the Law of the Republic of Uzbekistan “On Depositories’ Activities in the Securities
Market” in 1998, a two-level depository system started to be formed in the Republic, and in 1999 the Central
Depository was set up and the second-level depositories network for working with clients started its formation.

As of 2002, thirty five depositories have been functioning in the Republic. The development of the depository
system needs special consideration, since it is impossible to gain the investors’ confidence, and thereby to
attract foreign investors into the stock market without a reliable national accounting and keeping of securities
system.

Depositories are and will continue to be important both for the stock market and the economy as a whole.
However, it must be noted that in the developed countries there are many entities called custodians, which
entities provide their clients with a wider range of services as compared with the depositories. The functions
performed by the custodian are subdivided into basic, principal and additional ones. Thus, the custodian’s
basic function is, like the depository’s, to keep custody of the client’s securities. One of its principal functions
is to make payments under the transactions made by its clients. In addition, the custodians also collect and
pay dividends, interests and other income on securities, withdraw and pay taxes, provide the client with the
information on the issuer, calculate the amount of the client’s investment portfolio, etc. The range of services
rendered by the custodian expands to the extent of the development of investment processes.

The custodian business should also be developed in our country. Banks might have acted as the first
custodians, as they currently can take stock of the clients’ funds. Then certain specialized second-level
depositories might gradually have been reorganized as custodians.

UzSCSD news. UzSCSD is a sole organization maintaining the database of all securities issues in the country.
Providing this function, as of July 1, 2002, UzSCSD accounts securities issues of 4671 joint-stock companies,
showing an increase by 57 companies compared with the same period in 2001. As of July 1, 2002, the total sum
of authorized capitals of the companies makes 1,717 billion soum, representing an increase of 440 billion soum
over the same period last year; total amount of securities in the issues makes 1,190 million. securities
representing an increase of 156.2 million securities over the same period last year. Such growth can be
explained by the continuing privatization process in main branches of the economy.




                                                                                                                 newsletter • 10
  The distinctive Minangkabau roof
   style of the cultural & handicraft
complex in Seremban in the state of
                    Negeri Sembilan.




                                        On May 16, 2002 in the Republican Exchange Center Building, a Memorandum of Understanding signing
                                        ceremony between the State Central Securities Depository of the Republic of Uzbekistan (UzSCSD) and Korea
                                        Securities Depository (KSD) took place. According to the document signed by the General Director of UzSCSD,
                                        Nematjon Akbarov and the Chairman of KSD, Mr. Huhn-Gunn Ro, UzSCSD is continuously working on
                                        improvement of its activities and establishing relations with colleagues from depository systems of foreign
                                        countries, approaches to the global standards of depository activity. The memorandum is signed with the
                                        purpose of establishing, developing and strengthening relations between the depositories, as well as for
                                        providing of growth of investment activity between the countries through the creation of effective and reliable
                                        settlement system for securities transactions.

                                        The depositories will co-operate on cross-border linkages, an exchange of statistical data relating to
                                        depository activity and information about new technologies. In addition, they agreed to assist in study of
                                        depository systems, organization of mutual personnel training and seminars. On the Memorandum of
                                        Understanding signing ceremony, the Recommendations of KSD by results of study of the Uzbek securities
                                        market were presented by the Head of International Co-operation Team of KSD, Hyo-Sang Yoo. UzSCSD expects
                                        deepening and enhancing co-operation with KSD. At the same time, UzSCSD welcomes establishing close
                                        contacts with all members of ACG for mutual collaboration and exchange of experience.




                                                                                                                                                     newsletter • 11

				
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