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© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved.
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
• 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.
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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)
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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
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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
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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.
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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
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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
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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.
© Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved.
THANK YOU!
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