message from secretariat acg - 2004 · 2009. 3. 19. · message from secretariat acg - 2004 edition...

INTERVIEW WITH DEUTSCHE BANK AG, SINGAPORE

Message from Secretariat ACG - 2004

Edition I - July, 2004

Dear ACG Members,

Welcome to the 1st edition of ACG Newsletter in year 2004 – Weare very pleased and proud that we have been elected as ACGsecretariat for the period of 2004 and we have also been given theopportunity to share information with ACG members by issuingACG Newsletter.

In this first edition for the year 2004, we have slightly differentpresentation of information. To keep up with the developments ininternational capital markets, the editor interviewed DeutscheBank AG, Singapore, Ms. Elizabeth Chia, the Head of Productand Client Management, and Bursa Malaysia Bhd, representedby Mr. Suresh Maniam M, Manager, Business Development &Customer Relation Division, Clearing, Settlement & Depository.

As pointed out in the recent General Meeting of ACG7, there hasbeen an addition of 1 task force for accommodating new initiativesthat might later become new products or services for CSD.Therefore, in this newsletter, we provide information from ThailandSecurities Depository Co.Ltd (TSD), Korea Securities Depository(KSD), Indonesian Central Securities Depository (KSEI) andIndonesian Clearing & Guarantee Corp. (KPEI).

We hope this first edition of ACG Newsletter will become a usefuladditional reference for all members and we highly appreciate allinputs and criticisms.

KSEI – KPEISecretariat ACG - 2004

ACG Newsletters 2

* Message From Secretariat ACG - 2004 ................................................. 1

* ACG 7, Sharing Experience In The Island Of God ............................ 3-5

* ACG7 Photographs ................................................................................. 6-7

* Interview With Deutsche Bank AG, Singapore ............................... 8-11

* Post Demutualization Of Bursa Malaysia (Experience and Challenges) .................................................................. 12-13

* KSD - Opening Indirect Investment ..................................................... 14

* TSD - Future development ................................................................... 15

* KSEI - Implementation Of Post Trade Processing ........................... 16

* KPEI - Progress Update .......................................................................... 17

* ACG Members List ................................................................................. 18-19

*******

Contents Contents


ACG Newsletters 3

KSEI and KPEI have successfully hosted the 7 th General Meeting of the AsiaPacific Central Securities Depository Group (ACG7) at The Ritz Carlton Hotel,Jimbaran, Bali. At the end of the program, the participants coming from 17Central Securities Depositories from the Asia Pacific countries agreed toexchange information and experience for the development of ACG.

The splash of waves of the Jimbaran beach, the strains of the Rindikmusic and “Welcome” dance through the supple movements performed bythe Balinese traditional dancers marked the opening ceremony of the 7t h

General Meeting of the Asia Pacific Central Securities Depository Group(ACG7) held at The Ritz Carlton Hotel, Jimbaran, Bali. As the host, KSEI andKPEI were continuously praised by the delegates consisting of 35 participantsfrom 17 Central Securities Depositories (CSD) in the Asia Pacific countriesand 30 invitees from Bapepam, the Association and the sponsor of theprogram. Bali’s exotic Nature and panorama also supported the programthat had been prepared by the committee with thumping heart.

The annual program held on last October 2-3, 2003 was opened byKSEI Commissioner I Nyoman Tjager, KPEI Commissioner Agus Muhammad,and Bapepam Chairman Herwidayatmo. The three persons emphasized theneed for the improvement of infrastructures in the capital market industryand expected all delegates in the meeting to co-participate in contributingtheir ideas and sharing their experiences in order to achieve the mission ofACG, which was established 7 years ago.

Prior to the ACG7’s meeting session, the practitioners in capitalmarket industry and the banking industry from all over the world sharedtheir experiences. Lim Choo Peng shared his experience regarding the role ofCDP in the process of demutualization. Subsequently, the discussion panelunder the theme of “Improving the Financial Industry’s Handling ofCollective Investment Vehicle” discussed whether CSD could become thefacilitator for investors and agents it appointed in settlement of mutual fundtransactions. The speakers in the discussion panel comprised Lieven Van deBrande of Capco, Alastair Murray of HSBC, Paul Hedges of StandardChartered Bank, and Dennis Ngan of Deutsche Bank, emceed by Gagan Rai ofNSDL, India as the moderator.

The topic of the discussion panel was quite interesting particularlyfor Indonesia’s capital market, which has recently been paying its largeattention to mutual fund instrument. At present in Europe, mutual fundsettlement is considered inefficient, complex and relatively high-cost. Suchcondition produced an idea to develop a standard for trade message, connectivity,business practice and reporting and other processes related to the activity ofmutual fund.

ACG 7, SHARING EXPERIENCE IN THE ISLAND OF GOD

ACG7, SHARING EXPERIENCE IN THE ISLAND OF GOD

02 and 04 October 2003 - Bali, Indonesia

The main program was held on October 2 after lunch and on October3, preceded by the sharing session from every CSD regarding theachievement and development that are on the way or planned for thesubsequent years. The information given by each CSD delegate was quiteinteresting and beneficial to other delegates so that many questions wereraised at the session, such as for example account structure and developmentplan in conducting direct reporting to the level investors through internet.The next meeting session held on October 3 was focused more on discussionamong the task force members with the main agenda of discussing matterssuch as the Best Practice, Exchange of Information, Technology, Settlement and RiskManagement as well as Cross Border Linkage. The members of the task forceagreed to implement their respective missions aimed at strengtheningcommunication and coordination in providing inputs for the members byusing comparative survey and analysis from the distributed questionnaires.The result will be disclosed through presentation made by the chairpersonsof each Task Force at the general meeting.

During the discussion about the Task Force Exchange of Information,one of the members admitted to know absolutely nothing about the straightthrough processing (STP) issue and its benefits for the CSD in his country,which is still domestic investor oriented. Based on the result of thediscussion, it was concluded that exchange of information had not met theneed of the members yet so that a solution was required. The distribution ofquestionnaires alone was considered ineffective enough because every taskforce distributed questionnaires with almost the same content so as to causetrouble for the members.

As a whole, the series of discussions chaired by Benny Haryanto,the President Director of KSEI appointed then as the chairman by ACGmembers, run well and dynamically. With his leadership style Benny askedACG members to review the existence of task forces formed in 1998 at the3rd General Meeting in New Zealand and whether the five task forces namelythe Best Practice, Settlement & Risk Management, Exchange of Information, Technicaland Cross Border Linkage are still relevant under the present development. “We do not want the task force team members to only function to collectquestionnaires without knowing what to do with the results,’ said Bennyreferring to the explanation given by ACG members when they passed oninformation regarding the development of each member. Some of themembers were in the process and some have successfully developed theproducts that have value added services for the participants. The productswere among other things, mutual fund settlement, and direct reporting tothe level investors or discussion on CSD’s role in implementing goodcorporate governance.

Benny recommended the formation of task forces that accommodateor discuss the initiative of developing new products for CSD and thoseneeding information from other CSDs that have successfully developed theproducts. The Thailand Securities Depository and the Taiwan Central


ACG Newsletters 4


Securities Depository have, for example, successfully developed back officeservice for mutual fund. Meanwhile, India ha implemented STP for thedelivery of contract notes from brokers to custodian banks and investmentmanagers, almost similar to the system being developed by KSEI, namelyPost Trade Processing (PTP).

At the session, CSDs from other countries such as Hongkong, Japan,Singapore, Taiwan, Thailand, Bangladesh and Malaysia shared theiropinions. At the end of the discussion, the participants agreed to merge thece Best Practice and the Cross Border Linkage into the Exchange of InformationTask Force. A new task force was formed namely, the New Initiative Task Forceto accommodate discussion on the development of new CSD’s products in Asia Pacific,accordingly, the number of the Task Force becomes 4, namely; the SettlementRisk Management, Exchange of Information, Technical and New Initiatives.

Due to the fact that KSEI and KPEI hosted the ACG7 meeting, KSEI-KPEI are automatically appointed as the secretariat of ACG7 which willend until the organization of the ACG 8 to be held in Taiwan in 2004. KSEI-KPEI’s tasks are among other things publishing newsletters and cooperatingwith all existing task forces to obtain and disseminate information to allmembers of ACG.

The series of the ACG7 program ended on October 3, 2003 eveningpacked under a farewell dinner party with the background of the Bali Fair.Similar to that at the welcome cocktail at the opening ceremony, all guestshad fun time and enjoyed the dynamic and exotic Balinese atmosphere.The àla Bali dinner became more glittering when the Balinese dancersmanaged to persuade the discussion participants to dance together on thestage.

All ACG7 working team members convey their gratitude for theappreciation given by all the delegates and guests. See you again in theACG8 to be held in Taipei, Taiwan.

BARONG


ACG Newsletters 5

ACG 7 PHOTOGRAPHS

ACG Newsletters 6

ACG Newsletters 7

ACG 7 PHOTOGRAPHS


ACG Newsletters 8

As we have mentioned before, we intend to publish interviews with executive whohave a long experience in the finance industry. In this edition of the ACG Newsletter,we interview the Deutsche Bank AG, Singapore represented by Elizabeth Chia,who so gladly wished to exchange views, information may turn out to be interestingdiscussion material for the coming 8 th ACG General Meeting in Taiwan this year.May it be useful.

Financial Market Infrastructures – There is an opinion stating that FinancialMarket Infrastructures obtain a very competitive pressure, such as:

√ First, the competition between stock exchange and clearing andsettlement Organization.

√ Second, non-financial institutions providing trading services, clearingand settlement services to financial markets.

√ Third, large custodian especially global custodian.

Do you agree with this opinion ? How do you see it as a leading custodianbank in this region ? From a custodian perspective what is the risk implicationof that pressure.

In a given market place, a number of different organisations are bound toperform specific roles for their individual customers, often serving one anotherin the process and benefiting from this. Stock exchanges and depositorieshave clearly defined roles, to facilitate trading and clearing/settlement for theirmembers or customers, respectively. They provide adequate and robustinfrastructure and, though their customers may overlap, are not really able tofulfill all customer needs on their own. Global custodians are bringinginvestments into those markets where they are being serviced by domesticcustodians; both may do similar work but their orientation and function arequite different and, thus, both parties can co-exist. In this environment ofproven and professional providers, non-traditional institutions face thechallenge to find a proposition for their clients while adding value to the marketand finding ways to work with other market participants.

In Europe, the debate is on about the preference for a vertical model (oneorganisation provides trading/clearing/settlement) or the horizontal model(different organisations provide specific services). Either way, the providersperforming the individual services will have to live up to the value expectationsof their client base, and organisations not committed to this process, regardlessof which system they prefer, will face an uphill battle in any market place.

Head Of Product & Client Management, Asia Pacific

INTERVIEW WITH DEUTSCHE BANK AG, SINGAPOREINTERVIEW WITH DEUTSCHE BANK AG, SINGAPORE

ACG Newsletters 9

The last few years of continuous development in the Asian markets haveallowed market participants to identify, ring-fence, and largely cover in anadequate manner the risks arising in the securities market. New risks are createdfrom new products and new processes but are typically quickly explained andaddressed with proven methods.

It is not to be doubted that financial market infrastructures are facing challengesin this matter, namely high technology requirement to be more efficient andbenefits for shareholders. What do you think of this kind of opinion? Do youthink that financial market in Asia Pacific is much more than ready in facingthese challenges?

Technology is certainly an important factor in addressing current and futurechallenges in our industry. However, the correct application of technology remainscrucial. Cutting edge, web-based reporting systems may be of limited use if marketparticipants cannot connect their systems to a depository or pre-match automatically,as STP and real-time feeds will continue to be goals, not achievements. Technologydoes not have to be big and complicated, as the demise of GSTPA has shown.Today, technology is cheaper and easily available. Most often, measuredimprovements are better placed to achieve significant results. Here, the willingnessto address outstanding issues is as important as the tools to make it happen. Thisis where the Asian markets are more than ready to move ahead.

Ø You might be aware that some of the central depository or clearing &settlement organization are working hard to develop single platformcommunication or system solutions to provide value added services forcapital market transactions by maximizing the high technology to reducerisk, reducing cost and efficiency. However, the market participant such ascustodian have different point of view by giving their argument that centraldepository business strategy should not enter into their core services, i.e.mutual fund settlement, central matching or direct reporting to investor.What do you think of this?

At the time of physical settlement, the market called for central depositoriesthat could make all that paper go away, consolidate the often fragmentedsettlement process and provide a safe and reliable environment for domesticand foreign investors. The depositories had a formidable job on their handsbut have nonetheless achieved this target. In the meantime, the market andthe focus of the investors have moved on.Today, market participants areconcerned about transaction costs and processing speed as they face theirclients in an ever increasing competitive environment. Again, they are lookingat the depositories as proven, and central solution providers to address thosechallenges, e.g. lower costs, access to more securities, and interfaces wherethere are none. As a result, both parties are servicing their clients, thedepositories the market participants and the market participants the investorsin turn. In the area of risk or market initiatives, both parties are working togetherfor the benefit of the market and, ultimately, of the investors. These roles seemto work well for all parties and make up a significant portion of the confidenceinvestors have for a particular market.

ACG Newsletters 10


Going forward, there is definitely a need for one or more service providers toprovide centralized communication hubs and additional facilities such as tradematching to improve efficiency and reduce systemic risk in the capital markets.

In the mutual fund industry, different markets have found their own solutions orover time, solutions have evolved to satisfy participant requirements or thegeneral needs of the market. The overall benefits at the transactional level willinclude market efficiencies and better risk management making furthercontributions toward development of the capital market. For instance, in

Indonesia, the development and growth of the mutual fund industry has notonly provided individual investors with an alternative investment choice to abank deposit but is also becoming a significant pool of funds for the capitalmarkets. Mutual funds are significant holders of recap bonds.

Examples from markets around the world do not indicate any one business modelfor a central depository. In the trade transaction lifecycle, market participants areconstantly moving along the value chain in an effort to fine tune services orseeking opportunities to improve services. These changes ultimately make themarket more efficient. An infrastructure utility such as a central depository will

be characterized as being reliable, having sound IT infrastructure, is reputable,having relationships with critical financial institutions and is strategically placedto service key market participants such as brokers, custodians, insurancecompanies, banks. These characteristics and their strategic placement in thefinancial market places a central depository in an advantageous role in providing

related and “ancillary” services, should it choose.

In the United States, the post trade processing stage of the mutual fund industryhas been well served by a single service provider which is largely a privateenterprise. In Europe there are several products which are basically

communication hubs between participants, for example, between a bankdistributor and a transfer agent in the processing and settlement of a mutualfund application transaction. These services are being provided bycommunication companies with an established reputation, highly regarded bythe financial institutions, have systems with a high level of security and built

with a robustness to handle high transaction volumes of high value. Thesesystems also operate cross-border and can handle in multiple currencies.

What this illustrates is for any particular market there is no one solution. Themarket environment and the particular forces at play may determine the solution.

A vacuum may exist where in any particular market there may not be a viabledomestic service provider or an external solution may not be practical. In such asituation, as a public policy issue the capital market authorities may not want toleave it up to market forces, or time may not allow and may therefore take the

ACG Newsletters 11

initiative. A central depository as an existing infrastructure utility would be aprime candidate for providing services such as mutual fund post trade settlementor central matching facility. In some markets the central depository is already

providing this type of functionality.

Can a central depository make the jump to providing an expanded range ofservices?

This can be done, but it must becareful not to move too far away from its corecompetency of providing market infrastructure for the capital markets. The dangersmay arise when the provision of services becomes too remote from thesecompetencies such as servicing retail investors. Another consideration will be toensure there is a real need by the targeted financial institutions for the services

and they are attractively priced.


ACG Newsletters 12

In the beginning of January 2004, Bursa Malaysia Berhad (formerlyknown as Kuala Lumpur Stock Exchange) has completed itsconversion into a public company limited while at that very sametime a demutualization process was also conducted turning KLSEinto the Exchange Holding Company, the now renamed BursaMalaysia Berhad. Indonesia and perhaps other capital marketinstitution of the Asia Pacific region are now making a feasibilitystudy on or are undergoing demutualization. Let us now observean interview we made with Mr. Suresh Maniam M, Manager,Business Development & Customer Relation Division, Clearing,Settlement & Depository, Bursa Malaysia Bhd, and hope that wemay come up with useful information for a discussion.

What reason or factor caused the Bursa Malaysia Berhad (formerlyknown as Kuala Lumpur Stock Exchange) to conductdemutualization?

a) Competitive pressure faced from the following:i) Globalization and deregulationii) Advances in technologyiii) Market participants are becoming increasingly sophisticated.

b) The needs to strategically reposition itself to meet and address thecompetitive performance-oriented environment, and remain arelevant player in the regional and global capital markets, it has todemutualize and broaden its outlook to all its strategic

stakeholders.

How did Bursa Malaysia determine the demutualization model?Upon review of various legal requirements and other demutualisedand listed exchanges’ corporate and organisation structures, takinginto consideration the local requirements and environment, toensure that it would be better poised to face current and futurechallenges.

How would you describe the environmental changes followingdemutualization?

c) Economyi) more efficient and competitive framework for market

institutions;ii) greater efficiency and competitiveness will lead to reduced

cost of capital and better allocation of scarce resources;iii) enhanced promotion of external relationships, where

business alliances contributes positively in areas of foreigndirect investment (FDI), trade, inter-government relations,etc; and

iv) increased ability to retain participation of domesticcompanies and investors in the local capital market.

Post Demutulalization Of Bursa Malaysia (Experience and Challenges)

ACG Newsletters 13

d) Capital Marketi) broadened representation of stakeholder groups in the

demutualized KLSE’s governance;ii) reduced costs stemming from efficiency improvements

which can be passed back to market participants andimprove overall market competitiveness;

iii) increased participation from a broader group ofstakeholders, which would provide increasedinternational coverage of the Malaysian capital marketsand utilise competitive pressures to Malaysian securitiesindustry to increase levels of professionalism andsophistication;

e) Exchange itselfi) increased efficiency, accountability and transparency,

driven by value creation objectives;ii) customer driven approach, thus ensuring interests of a

broader set of market participants are taken into account;iii) increased speed and flexibility in decision-making to keep

pace with the dynamic marketplace, andiv) enhanced ability to raise capital to fund critical

investments and business expansion.

Was there any impact towards operations occurring at BursaMalaysia Depository (formerly known as MCD) specifically? Didany extreme structural changes take place?

Yes, whereby the operational and management of the depositorywas consolidated into Clearing, Settlement and DepositoryBusiness Unit which comprise of Bursa Malaysia SecuritiesClearing Sdn Bhd, Bursa Malaysia Derivatives Clearing Bhd andBursa Malaysia Depository Sdn Bhd.

How did Bursa Malaysia socialize its organization’s structuralchanges, which of course influenced the efficiency of every relatedwork process?

The Exchange has recently gone through an organisationrestructuring with departments with similar functions beingconsolidated while new divisions were created to undertake newchallenges.

Can you mention some of the challenges ahead brought by the newstructure?

f) More Professional: the exchange has to be more “customer friendly”and less solutions-oriented, less bureaucratic and more business-driven.

g) Sensitive : continuously look out for investors’ interests e.g. costeffectiveness, corporate governance, innovation, etc.

h) Lead Development of Capital Market : initiate more businessdevelopment and implement in a timely manner; adopt bestpractices and ensure practicality to both domestic andinternational players, etc.

Post Demutulalization Of Bursa Malaysia (Experience and Challenges)

ACG Newsletters 14

KSD Opening Indirect InvestmentAsset Deposit & Settlement System

Korea Securities Depository (KSD)

The Korea Securities Depository (KSD) launched the

Indirect Investment Asset Deposit & Settlement Sys-tem on April 6, 2004. The launch of the system hasmade KSD the single gate of the deposit & settlementof the collective investment vehicles of all financialinstitutions.

The system integrates and manages trade confirma-tion, instruction delivery, settlement method, fund-by-fund method, etc. In addition, it standardizes thedeposit & settlement services of securities includingstocks, bonds, and CDs managed within the indirectinvestment assets.

With the launch of the system, physical beneficiarycertificates will be replaced with electronic beneficiarycertificates, dramatically improving the infrastructureof the fund deposit and settlement. In addition, thefund-by-fund deposit and management will make itpossible for the asset management companies, trust-ees, and servicing companies who manage the samefunds to compare and confirm their records at anytime.

The newly launched system is expected to improvebusiness efficiency and transparency. Under the previ-ous system, financial institutions had different settle-ment systems and different process methods, result-ing in low efficiency and transparency.

Furthermore, the system, which is based on the net-work of institutional investors, is expected to acceler-ate digital innovation in the securities and financialmarket, greatly contributing to the earlier-than-ex-pected realization of T+1 and STP in Korea.

KSD Opening Indirect InvestmentAsset Deposit & Settlement System

ACG Newsletters 15

Thailand Securities Depository(TSD)

Thailand Securities Depository Future Development

Online Initial Public Offering (IPO Online)To enhance the ability of issuing companies to mobilize funds by listing

their securities on The Stock Exchange of Thailand (SET), the TSD has developedthe Online Initial Public Offering (IPO Online). This share subscription onlineprogram will be the central system for lead underwriters, underwriters andselling agents to process subscription transactions using the same system andto access and inquire online information on a real time basis. This will helpreduce both the investment and operational costs of securities subscription byhelping reduce information gathering time, the number of processes used,and human errors from re-keying, etc.

TSD WebsiteAs TSD’s website: www.tsd.co.th. is one major communication channel

for service users to contact us, we will develop it to be a source of timelyinformation and be increasingly user-friendly. What’s more, the TSD websitewill be the information center for five key services (Securities Clearing andSettlement, Securities Depository, Securities Registration, Fund Registrationand Back Office Service Bureau). The new version of the TSD website will belaunched in the year 2004.

Development of Real Time Gross Settlement: RTGSTo support the clearing and settlement of any financial instrument

innovation and to serve as an alternative channel of clearing and settlementfor users, the TSD, in collaboration with our stakeholders, will develop theReal Time Gross Settlement system.

Shortening the Settlement Cycle to T+2 in 2005.Acknowledging that a shortened clearing and settlement cycle helps

the securities industry to reduce risk and enhances the liquidity in the clearingand settlement system, the TSD will cooperate with the clearing and settlementstakeholders to overcome any problems and find any needed solutions toassure the readiness of the system for market participants in order to shortenthe settlement cycle from T+3 to T+2 in the year 2005.

Enhancing Securities Borrowing and Lending in the Thai CapitalMarkets.

The TSD plans to conduct a study on establishing a Securities Borrowingand Lending (SBL) market. The study will enhance the SBL business in theThai capital markets and increase the efficiency of risk management practicesin our clearing and settlement system. Additionally, the SBL business will serveas another choice for investors for increasing their income.

Development of Businesses and Architectures for Post-TradingSolutions

Recognizing the capability and readiness of the Thai capital markets tofollow the Straight Through Processing (STP) concept, the TSD, in 2003,cooperated with the SET to develop businesses and architectures for post-trading solutions in our project called “Post-Trade Integration”. This project isto render flexibility in providing services to support the progress of the Thaicapital markets. In 2004, the TSD will continue to develop its STP system toaccomplish our objective to support the Thai capital markets with the mostefficient integration post-trading system available. The primary system isexpected to be in operation in 2004.

ACG Newsletters 16

Post Trade Processing – KSEI

Since 1 th July 2004 KSEI has implement a new feature in the C-BEST, namely Post Trade Processing (PTP).

In March 2004, KSEI introduced the PTP feature to SecuritiesCompanies (SC), Investment Managers (IM) and Custodian Banks (CB),and have so far obtained positive response from them.

The realization of PTP is expected to improve the quality ofSTP (Straight Through Processing) in Indonesian capital markets. And asthe final objective, it is expected that the efficiency in the workflowand transaction settlement risk can be improved.

Investment Managers and Account Linkage

Previously, C-BEST can only be accessed by securitiescompanies and custodian banks. After the application of PTP in C-BEST, investment managers will also have access to engage in theactivities of securities transaction through C-BEST.

One investment manager can be linked to one or several sub-accounts managed by one or several participants (SC and CB).However, one sub-account can only be linked to one investmentmanager. An investment manager who has been linked to a sub-accountcan see the detail of the relevant sub-account as well as the balance ofsecurities owned by the investment manager in the sub account.

Trade Confirmation (TC)

With the integration of PTP into the C-BEST, a SC will no longerneed to send trade confirmations (TC) by mail or facsimile. The CB cansend the confirmation through C-Best and it is directly sent to theinvestment manager concerned.

When a SC has entered a TC to the C-BEST, the relevantinvestment manager can directly see this confirmation on-line. Theinvestment manager can directly accept or refuse the TC sent by theSC through the available function.

Settlement Instruction (SI)

Another facility provided for investment managers by the C-Best is Settlement Instruction Creation. This function is used to allocatesecurities/funds to be appropriated to settle transactions and at thesame time to send a settlement instruction to the relevant custodianbank and stock exchange member.

This PTP module also provides a facility for inquiry of TC, SIand OTC instructions that makes it easier for stock exchange members,custodian banks and investment managers to monitor PTPtransactions from the beginning up to the settlement of the transaction.

With the introduction of this new PTP module and 161 stockexchange members and 18 custodian banks directly linked throughthe C-BEST, in addition to the inclusion of investment managers as oneof C-BEST users, Straight Through Processing (STP) in Indonesiancapital market is expected to be achieved.

INDONESIAN CENTRAL SECURITIES DEPOSITORY (KSEI)


ACG Newsletters 17

INDONESIAN CLEARING AND GUARANTEE CORPORATION (KPEI)

Progress Update

Surabaya Stock Exchange and Indonesia Clearing and GuaranteeCorporation (KPEI) had launched the trading, clearing and settlement ofForeign Index Market on Tuesday, 27 April 2004. These indexes are DowJones Industrial Average Index (DJIA) and Dow Jones Japan Titan 100.

The trading process commence through the trading system workstation- Futures Automated Trading System (FATS) – client places order throughbroker, where broker will input the client’s order into FATS workstation.FATS will match the sell and buy order based on price and time priority.Executed trades are reported real time. At the end of trading day, executedtransaction will be transmitted to KPEI for clearing, trading and margincall calculation. KPEI clears trades based on the open position, movementof price during trading hours, daily price from the market and final pricefrom underlying market. KPEI performs clearing process through markto market during trading hours, mark to market at the end of day andmark to market on settlement date.

All member are obliged to pay for initial margin amounted to IDR 400millions therefore all trades are validated against his/her initial margin.If certain members suffer loss equals to certain percentage from initialmargin, the exchange will limit their transaction and KPEI will call forintra day margin.

The commencement of the project hopefully will increase the variety ofinvestment product for investors.

Beside Futures Index, KPEI has completed its Options, Clearing andSettlement project with Jakarta Stock Exchange. In order to havesuccessful implementation, several functional and technical testing ofthe system had been done to ensure it works as planned. Theimplementation of the project is still waiting for the approval fromSecurities Exchange Commission (Bapepam).

Today, In order to expand its business service, KPEI is currentlyundertaking three main projects; the three main projects are clearingand settlement of Corporate Bonds, Government Bonds and Repo. Theclearing and settlement of Corporate Bonds is the joint project amongSurabaya Stock Exchange, KSEI and KPEI whereas Government Bondsand Repo is joint project with Bank Central of Indonesia.

ACG Newsletters 18

ACG - Members List

a

NO ACRO NAME NATION WEBSITE E-MAIL

1 SFE Austraclear Limited Australia http://www.sfe.com.au [email protected]

2 SFE Austraclear Limited Australia http://www.sfe.com.au [email protected]

3 ASTC ASX Settlement & Transfer Corporation Pty Limited

Australia http://www.asx.com.au [email protected]

4 CDBL Central Depository Bangladesh Limited

Bangladesh [email protected]

5 CDC Central Depository Company of Pakistan Limited

Pakistan http://www.cdcpakistan.com [email protected]

6 CDP The Central Depository (Pte) Limited

Singapore http://www.sgx.com [email protected]

7 CDSL Central Depository Services (India) Limited

India http://www.cdslindia.com [email protected]

8 CDSL Central Depository Services (India) Limited

India http://www.cdslindia.com [email protected]

9 SD&C China Securities Depository & Clearing Corporation Limited

P R China http://www.chinaclear.com.cn [email protected]

10 SD&C China Securities Depository & Clearing Corporation Limited

P R China http://www.chinaclear.com.cn [email protected]

11 HKMA Hong Kong Monetary Authority Hong Kong http://www.info.gov.hk/hkma [email protected]

12 HKMA Hong Kong Monetary Authority Hong Kong http://www.info.gov.hk/hkma [email protected]

13 HKSCC Hong Kong Securities Clearing Company Limited

Hong Kong http://www.hkex.com.hk [email protected]





16 JSCC Japan Securities Settlement and Custody, Inc.

Japan http://www.jscc.co.jp [email protected]

17 JSCC Japan Securities Settlement and Custody, Inc.

Japan http://www.jscc.co.jp [email protected]

18 KSD Korea Securities Depository Korea

19 JASDEC Japan Securities Depository Center, Inc.

Japan http://jasdec.com [email protected]

20 JASDEC Japan Securities Depository Center, Inc.

Japan http://jasdec.com [email protected]

21 CDS Central Depository Systems (PVT) Ltd

Sri Lanka http://www.lanka.net/cse [email protected]

22 CDS Central Depository Systems (PVT) Ltd

Sri Lanka http://www.lanka.net/cse [email protected]

23 MCD Malaysian Central Depository SDN BHD

Malaysia http://www.klse.com.my [email protected]

http://www.ksd.or.kr [email protected]


ACG Newsletters 19

ACG - Members List

NO ACRO NAME NATION WEBSITE E-MAIL

24 NSCCL National Securities Clearing Corporation Ltd.

India

25 NSDL National Securities Depository Limited

India http://www.nsdl.co.in [email protected]

26 NZCSD New Zealand Central Securities Depository

New Zealand http://www.rbnz.govt.nz [email protected]

27 PCD Philipine Central Depository Inc. Philipine http://www.pcd.com.ph [email protected]

28 PCD Philipine Central Depository Inc. Philipine http://www.pcd.com.ph [email protected]

29 KPEI PT Kliring Penjaminan Efek Indonesia

Indonesia http://www.kpei.co.id [email protected]

30 KPEI PT Kliring Penjaminan Efek Indonesia

Indonesia http://www.kpei.co.id [email protected]

31 KSEI PT Kustodian Sentral Efek Indonesia

Indonesia http://www.ksei.co.id [email protected]

32 KSEI PT Kustodian Sentral Efek Indonesia

Indonesia http://www.ksei.co.id [email protected]

33 SCANS Securities Clearing Automated Network Services Sdn Bhd


34 SCANS Securities Clearing Automated Network Services Sdn Bhd


35 UzSCSD State Central Securities Depository of the Republic of Uzbekistan

republic of Uzbekistan

http://www.deponet.uz [email protected]

36 UzSCSD State Central Securities Depository of the Republic of Uzbekistan

republic of Uzbekistan

http://www.deponet.uz [email protected]

37 TSCD Taiwan Securities Central Depository Co. Ltd

Taiwan R.O.C http://www.tscd.com.tw [email protected]

38 TSD Thailand Securities Depository Co. Ltd

Thailand http://www.set.or.th [email protected]

39 TSD Thailand Securities Depository Co. Ltd

Thailand http://www.set.or.th [email protected]

40 - Thomas Murray http://www.thomasmurray.com [email protected]

Secretariat:Indonesian Central Securities Depository (KSEI)

Jakarta Stock Exchange Building, 1 st Tower 5 th FloorJl. Jend. Sudirman Kav. 52-53

Jakarta 12190Ph. (62-21) 5299 1099, Fax (62-21) 5299 1199

BALIIndonesia

Asia Pacific Central Securities Depository Group

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