Transcript The Clearing, Settlement and Depository Dept

Dubai Financial Market
ALEXANDRIA - EGYPT
26 April 2009
About DFM
Vision:
The Financial Market of Choice
Mission Statement:
To create a fair, efficient and transparent
marketplace that provides choices through the
best utilization of available resources in order to
serve all stakeholders.
DFM Objectives
1.
2.
3.
4.
5.
6.
Providing an opportunity to invest in securities in a manner that better serves
the national economy.
Regulating the process of trading in securities ensuring the protection of
investors from unfair and improper practices.
Creating highest liquidity in the marketplace through the interaction of supply
and demand based on fair and equitable trading practices between investors.
Organizing the transfer of securities ownership through the CSD Department,
which operates an electronic system ensuring efficiency and timeliness of
transfers.
Implementing rules of professional conduct and discipline between brokers
and DFM staff to maintain a high level of integrity and provide them with
proper training.
Collecting data and statistics about securities and issuing reports based on this
information.
UAE Capital Market Structure
Securities & Commodities Authority
Dubai Financial Market
Dubai Gold and
Commodities Exchange
Abu Dhabi Securities
Exchange
4
Dubai Free Zone Exchanges
Dubai Financial Services Authority
NASDAQ Dubai
A purpose built free zone
regulator, which is independent of
all financial and ancillary services
conducted through the Dubai
International Financial Center
(DIFC)
Dubai Mercantile
Exchange
5
Dubai Capital Market Expansion
Comments
Public
• Borse Dubai
shareholders :
Borse Dubai
has
3
main
 ICD
(International
Corporation of Dubai): 60%
80%
20%
DFM
19.99%
NASDAQ-OMX
20%
LSE
 DIFCI (Dubai International
Financial
Center
Investments): 20%
 DFG
(Dubai
Group): 20%
Financial
NASDAQ-DUBAI
6
DFM – P.J.S.C.
DFM – P.J.S.C.
Date of Listing:
Mar 7, 2007
Sector:
Investment & Finance Services
Authorized Capital:
8,000,000,000.00 AED
Issued Shares:
8,000,000,000.00
Par Value/Share:
1.00
Ownership
80 % owned by Bores Dubai and 20 % public
Regulatory Developments
2007 - 2008 ( completed )
Federal Regulatory
Developments
SCA Regulatory
Developments
2009 (expected)
Companies Law:
• Reduction of minimum floatation
from 55% to 30% for family
businesses.
• Capital Markets Regulations
• GCC citizens are treated as UAE
nationals.
• Companies Law
- New rules being added.
• Corporate Governance Guidelines.
All listed companies should
implement the guidelines by April
2010 .
• Custodians – drafted .
• Margin Trading – Brokers training
phase.
• ETF – approved.
• Drafted new IPO rules which is due
to be published soon.
• Capital Adequacy .
9
DFM Main Components
Trading
Organizing trading
Listing securities
Brokerage licensing
Arbitration
Market Control
Disclosure monitoring
Brokers Monitoring
Clearing, Settlement &
Depository (CSD)
Registry Upload &
Update
Stock Transfer
• Corporate Actions
• Bonus shares
• Stock Split
• Raising capital
Trading Settlement
Investor Numbers
Securities safe keeping
Accessing DFM
Fully Automated Trading system
Recorded phones
Settlement type is T + 2
Trading priorities : Best price & best time
Prompt transfer of ownerships
DFM is accessible to all international investors
Foreign ownership allowed for most traded companies
Absence of Capital gain tax
Dubai government’s commitment to growing capital markets as part of
Dubai vision
DFM Trading Session
Order Entry
9:30 am
10:00
To
2:00
2:00
Pre-Open Session
Continuous
Trading
Closing
Communication Tools
Visit
Fax
Broker
Phone
ETrade
Operational Capabilities
Trading
System
Clearing,
Settlement
And Depository
Risk
Management
• Continuous, order-driven, fully automated trading system
• Tight coupling with depository system, enabling validation of sell orders against
depository inventory prior to trading
• Transparent, automated and cost-effective information dissemination
• Upgrading to a high performance OMX X-Stream system
•
•
•
•
T+2 rolling settlement with multilateral netting
Same-day turnarounds (back-to-back transactions)
Corporate actions (cash dividends, stock splits, bonus issues, etc.)
Undertaking an operational review to ensure compliance with G30
recommendations
•
•
•
•
Trades once executed are final and irrevocable
Trading limits for market participants commensurate with posted collateral
Immediate suspension of trading for defaulting brokers
Established business continuity and contingency plans
14
Innovating to Advance DFM’s Performance
OMX X-Stream
•
•
•
•
•
Huge excess with OMX x-stream( executes more than 720,000 trades per session)
Reliability and fault tolerance
High performance
Scalability and functional depth provides for virtually unlimited growth
The ability to integrate new business functions allows the trading system to evolve quickly and
effectively in response to competitive and regulatory pressures
CSD
•
•
•
Voice recognition system
Adopting the DVP model in support of international investors
Offering facilities such as (securities borrowing and lending and buy-in) to facilitate successful settlement
15
DFM Performance
AED Millions
Trading Value
450,000
405,161.47
400,000
379,410.40
347,980.04
350,000
305,202.06
300,000
250,000
200,000
150,000
100,000
50,000
51,055.98
27,602.78
0
2004
2005
2006
2007
2008
Q1, 09
DFM Performance
Million Share
Trading Volume
120,000
105,257
100,000
76,508
80,000
60,000
39,644
40,000
25,542
22,688
20,000
5,122
2004
2005
2006
2007
2008
Q1, 09
DFM Performance
Market Capitalization by Sector
Transportation
12.01%
Telecom
4.24%
Utilities
0.33%
Banking
33.03%
Realest. &
Construction
14.98%
Consumer Staples
0.64%
Materials
13.72%
Insurance
4.55%
Invest. & Fin.
Services
16.51%
Foreign Ownership
Foreign Ownership By Category
(%)
19
Listings Progress in DFM
10
10
9
8
7
6
5
4
3
2
1
0
10
7
6
5
4
4
3
2
1
2
1
1
3
3
2 2
2
1
1 1
1
0
2003
0
2004
2005
UAE
UAE
Forign
Companies
Funds
Bonds & Sukuk
Stocks
1
2006
Forign Companies
2007
Funds
0 0 0
2008
2009
Bonds & Sukuk
2000
10
2001
1
2002
1
2003
1
2004
4
2005
10
2006
6
2007
7
2008
3
2009
1
0
0
0
10
0
3
1
11
0
1
0
12
0
2
1
13
1
2
1
18
2
2
3
30
10
1
1
46
3
4
0
56
5
1
2
64
0
0
0
65
Listings Progress in DFM
Stocks Listed on DFM
70
64
65
2008
2009
56
60
46
50
40
30
30
18
20
10
11
12
13
2000
2001
2002
2003
10
0
2004
2005
2006
2007
Stock Game
3000
2500
2000
1500
Colleges
Students
1000
500
0
2003
2004
2005
2006
2007
2008
2009
2009
2008
2007
2006
2005
2004
2003
28
16
22
38
25
21
17
2103
1156
1493
2705
1360
783
357
Colleges
Students
22
DFM Statistics
767,841
Total Number of Investors
239,217
Foreign Investors
101
Total Brokerage Firms
23
DFM & Society
• In support of "UAE
Free of Thalassemia by
2012".
• Blood Donations
• DFM Employees
Health Insurance
Program
Health
Sports
• UAE Basket Ball
Team
• DFM Football Team
• UAE Horsing
• The Stock Game For
Students
• Visit Colleges and
Schools
• Receive Delegates
• DFM & SCA public
awareness
Awareness
Clearing, Settlement &
Depository Division
CSD
CSD Organizational Chart
Clearing , Settlement & Depository
Division
Director
Call Center
Investors
Affairs
Department
Clearing &
Settlement
Department
Central
Depository
Department
CSD in Brief
1. Is considered a major Division and most
important foundation of DFM.
2. Supports the market’s functions through efficient
and active performance.
3. Provides the DFM stakeholders with the
optimum services.
4. Efficiently and confidentially manage and keep
securities to protect all parties rights.
CSD in brief … cont
5. Handles depository and safekeeping of all
securities listed in the market.
6. Organize, Manage and Maintain the database for
all listed securities in the automated clearing
system.
7. Provide the listed companies, accredited brokers
and custodians with the direct linkage of the
automated clearing system.
8. Operates with dematerialization securities.
CDS in brief … cont
9. Carry out clearing and settlement of all trades
executed in the market.
10. Acts as counterpart to each broker or custodian.
11. Deals directly with the settlement banks for the
purpose of settling the net to pay and to collect to
and from the participants.
CSD Provides Services for the following:
Investors
Brokers
Listed
Companies
Custodian
Banks
Other Parties
CSD Investor Services
1. Generating and updating the unified Investor Number (IN).
2. Reserving securities of investors unwilling to trade.
3. Transferring ownership from certificates to electronic environment.
4. Transferring securities ownership between investors in execution
family& inheritance deals, court orders, trades made prior to DF
opening, and other.
5. Stock Transfer :Transferring Securities from CSD Account to Brok
Account.
CSD Investor Services … cont
6. Registry Transfer : Transferring Securities from Broker Account
to CSD Account.
7. Transferring Securities Between Brokers.
8. Issuing many types of “Securities Balance Statements” at
request.
9. Issuing Audit confirmation letter at request.
10. Issuing and delivering statements to subscribing investors
( Daily, Weekly & Monthly).
CSD Investor Services … cont
11. Sending free statements to investors on a quarterly basis.
12. Sending free statements to traders on a daily basis.
13. Providing E-Services to Investors, enabling them to register
through “Electronic Reports” , to view their stock account
balances online.
14. Issuing Power of Attorneys for the purpose of Dubai Financial
Market Only.
15. Changing/Adding of investor information.
16. Marking pledge on securities
CSD Brokers Services … cont
Transferring Securities between CSD and Brokers.
1.


2.
Stock Transfer
Registry Transfer
Managing Bank Guarantee.
 Minimum of AED 20 Million
 Maximum Trading Limit
CSD Brokers Services … cont
3.
Increasing the Trading Limit:





4.
New Bank Guarantee
Undertaking Letter from the Issuer Bank of B.G.
Deposit in DFM Account
Freeze Securities
Guarantee Amount that is to collect on (T+1)
Managing Clearing & Settlement process:




Prepare Settlement Report on (T+0).
Confirmation of Settlement on (T+2) @11:00 am.
Financial Penalty
Suspension from Trading (allowed to sell only)
CSD Brokers Services … cont
5. Prepare different types of reports upon Brokers request.
6.
7.
Correction of deals executed by mistake.
• Fees (0.003*number of shares*price of deal)
Transfer of Settlement amount from one bank to another.
8.
Transfer of pledged securities to Broker for sale.
9. Conduct training programs for new brokers.
10. Freeze and Release of pledged securities.
CSD Listed Companies Services
1. Issuing a share book.
2. Issuing reports upon request.
3. Amending shareholders information.
4. Receiving share certificates on behalf of listed companies.
5. De freezing share certificate ( Dematerialization ).
CSD Listed Companies Services … cont
6. Providing listed companies with subscription service in different
types of reports.
7. Applying all types of corporate actions on shareholders
accounts.
8. For sub-listed companies, applying the instructions of depositing
and withdrawing shares.
 For depositing the shares the instruction has to come for the company's
registrar.
 For withdrawing the shares the investor gives the instruction in writing.
CSD Listed Companies Services … cont
9. Customizing reports for listed companies upon their request.
10. Providing sub-listed companies with monthly reports that shows
all activities took place during the past month for their
shareholders.
11. Sending a free share books annually at the end of the year.
12. De-freezing shares on behalf of listed companies.
13. Providing listed companies with reports that shows all Pledge
Details at the time of Corporate Action.
CSD Custodian Services
1. Issuing investor numbers.
2. Transfers.
3. Send Daily Reports about custodian clients trade details (without
fees).
 Settled Securities Report
 Traded Securities Report
 Trades by Custodian
 Investor Balance for Custodian
 Investor Position for Custodian
4. Customizing Reports upon their request (with fees).
5. Transfer of Settlement Obligations to Broker:
Thank You
Questions