AFRICA MIDDLE EAST DEPOSITORIES ASSOCIATION MEETING

HELD IN CAIRO, EGYPT

TUESDAY OCTOBER 25 - FRIDAY OCTOBER 28, 2011

PRESENTATION BY

STEPHEN TETTEH

CHIEF EXECUTIVE OFFICER

CENTRAL SECURITIES DEPOSITORY GHANA LIMITED

Central Securities Depository (Gh.) Ltd

IntroductionGovernanceStructure of accountsIT InfrastructureFunctions Current ReformsFuture Developments

Introduction

A vision embodied in the Financial Sector Strategic Plan

Recommended the establishment of the Depository

A bond development committee established to spearhead the development

Bank of Ghana provided fundingCSD went live November 29, 2004

Introduction

Vision: the CSD seeks to be among the leading global institutions providing efficient depository services to the financial markets to promote investment and economic growth in Ghana and the sub-region

Mission: to provide secured and dependable clearing, settlement and depository services to government securities and money markets in an efficient and cost effective manner

Ownership and Governance

Started as a Department of Bank of GhanaIncorporated in June 2010 as a wholly-owned

subsidiary in line with the CSD Act 2007, Act 733

Well capitalized over and above the requirement of SEC

Seven member Board of Directors appointed headed by the Deputy Governor of Bank of Ghana

Objectives of the Depository

To reduce risks and improve the efficiency of securities settlement

To provide a central depository for securities in Ghana where records of beneficial ownership of debt and equity instruments are kept in electronic form

To undertake clearing and settlement of book-entry of debt and equity instruments

To handle all forms of corporate actions for debt and equi9ty instruments including maturities and interest payments

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Overview of the CSD IT Infrastructure

The CSD System is a Web-based applicationIt runs on both a Wide Area Network and via

the InternetSecured connection

httpsVeriSign and now Oracle Certificate for point-

to-point data encryption.Depository Participants log onto the system

from their offices via a web browser to work.Bulk files are exchanged between the CSD and

Depository Participants via Secured File Transfer Protocol (SSH).

Keeping Connected In A Secured Way

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Software ImplementedServer Operating System (OS) – Linux

RedHat Enterprise EditionInternal Server OS – Windows Server

2003PC OS – Windows XPReport Generating Tool – Crystal ReportJinitiatorIpswitch WS-FTP Pro Software

Linux – More Security, Better Protection

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Database/Application Server Software

Oracle Database 9i - Enterprise Edition

Oracle Application Server 9i – Enterprise Edition

Later Migrated To Oracle Database 10g and Oracle Application Server 10g

Oracle –Leaders in Database Technologies

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Network Infrastructure – CSD PWAN & Internet Backup

Redundancies To Ensure Biz Continuity

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Application Software Web Application Browser Application Server Database Server

Communication Two Modules

Treasury Auction CSD System

User Access Login Prefix segregates information (e.g. EBGPD) Account Expiry Time Out No Concurrent logons

Web Based Applications Leeds to Efficient, Effective Management

Account Structure of the Depository

CSD

custodianBeneficial

OwnerBeneficial

OwnerCustodian

Unit Trusts Foreign Nominee

Beneficial Owner

Structure of Accounts

All domestic accounts for both individual and corporate investors are held at the beneficial level

Foreign investors can hold accounts both as beneficiaries or through nominees

Acts as transfer agent and registrarOwnership is evidenced by statement of Accounts

from the DepositoryProcesses interests and maturities paymentsAccounts are registered through participantsCurrently more than 370,000 account holders

Agents of the Depository

Known as Depository Participants Made up of 28 banks 8 brokerage firms licensed by the SEC SSNIT (The national pension fund) Bank of Ghana 3 custodian Banks

Criteria for admission Licensed by BoG or SEC and in good standing Financial position Technical capability Sign a Participating agreement

Primary Auction

CSD manages the electronic primary Auction system

Closely coupled with the DepositoryReceives electronic bids of individual

investors through primary dealers. 15 banks licensed as Primary Dealers

Securities allotted at the primary auction flow smoothly into beneficiary’s accounts after settlement

Services provided

Trade reporting and matchingClearing positions generated and

communicated at the participant levelRepurchase agreements among Banks using

securities holdingsCollateral against lending facilitiesIssuing of statements on positionsInformation dissemination to market

SETTLEMENT

Settlement at both Primary and Secondary transactions are done through Central Bank funds

Settlement model DVP II

Settlement Cycle T+0 for secondary trade (to be reviewed to rolling

T+1 or T+2) T+1 for the primary auction

Interest and Maturities Processed and paid through the bank accounts of

investors Advice sent through the banks

Recent reforms

Review of Primary Dealing System licensing dedicated institutions as PDs Underwrite Government securities issues Make market by two-way quotes on the secondary

market Buy bulk at the primary auction for redistribution

Interface between CSD and RTGS To provide STP and DVP

Planned Developments

Set up Guarantee FundMark-to market price determinationInstall an Integrated Trading system for

money market, securities and forex transactions

Take on other value-added activities Withholding tax collection Collateral management Registrar services for unlisted securities, mutual funds

and other collective schemes