Chengetedzai Depository Company Limited

Transcription

1 Chengetedzai Depsitry Cmpany Limited CSD PROJECT STATUS Presenter Campbell Vincent Musiwa Presentatin Date 9 Nvember 2014

2 Zimbabwe Cuntry Overview Ppulatin f Zimbabwe 13 Millin Estimated that 4 millin peple leaving in the Diaspra Achieved Independence in 1980 Grss Dmestic Prduct USD13.5 Billin (2013)

3 Zimbabwe Cuntry Overview Hyper Inflatin 2007 t Dllarized (USD) Y--Y Inflatin 0.9% p.a. (Sept 2014) Mst favurable weather cnditins Rich in Minerals Once a striving agricultural hub

4 Overview f the Regulatr f the Capital Markets - SECZ Securities & Exchange Cmmissin frmed in 2008 Under the auspices f the Ministry f Finance Five Cmmissiners Regulates and licenses the capital markets players The Stck Exchange Brkers Central Securities Depsitry Registrars/Transfer secretaries Custdians Asset Managers

5 Overview f the Stck Exchange Stck Exchange and CSD nt vertically integrated Stck Exchange cmmenced peratin in 1896 Stck Exchange stpped perating in 1924 Re-cmmenced in 1946 Open Cry system with a target f implementing an ATS by Listed Cunters and mulling the implementatin f a SME Exchange and a Bnd Market

6 70.00 ZSE TRADES TURNOVER VALUE USD (millin) Turnver Value in USD (millin) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nv Dec Ttal

7 Overview f the Central Securities Depsitry Chengetedzai We will keep it Safe Incrprated in 2010 in respnse t a Public tender by the Securities & Exchange Cmmissin t implement a CSD Awarded the tender t Chengetedzai in December 2010 Quasi Gvernment wns 58 % f the CSD Three Banks Zimbabwe Stck Exchange One leading Registrar

8 Central Securities Depsitry Sharehlding Structure # Accunt Name Shares % Ttal 1 INFRASTRUCTURAL DEVELOPMENT BANK OF ZIMBABWE 111, FIRST TRANSFER SECRETARIES (PRIVATE) LIMITED 111, ZB FINANCIAL HOLDINGS LIMITED 111, ZIMBABWE STOCK EXCHANGE 111, MATIONAL SOCIAL SECURITY AUTHORITY - NPS 97, CBZ HOLDINGS LIMITED 89, PROMOTERS 111, ,

9 Overview f the Central Securities Depsitry Fee Structure Fees as gazette in Statutry Instrument 108 f 2014 Type f Charge Buying (%) Selling (%) Brkerage Fees Securities and Exchange Cmmissin Levy Zimbabwe Stck Exchange Levy Central Securities Depsitry Levy Stamp Duty Capital Gains Withhlding Tax % Brkerage Fees Ttal Transactin Csts Ttal Csts fr Buying and Selling 4.188%

10 The Rad Travelled

11 Timeline

12 Timeline

13 System Vendr CMA Small Systems AB Representative ffices in Sweden, Russia and France. Market activities fcus n Eurpe, Asia, Africa, Suth America and Middle East. At present, The head ffice is lcated in Stckhlm, Sweden. A market leading prvider f systems slutins t cmpanies perating in financial markets. Chengetedzai selected the DEPO/X system frm CMA fr its Central Securities Depsitry (CSD) system due t its efficient and rbust design t supprt registry, clearing and settlement peratins. DEPO/X supprts all mdels f DvP via an interface with any payment systems (e.g. via S.W.I.F.T).

14 DepX System - Mdules Mdule DepX Standard Editin Risk Management Mdule Fix Prtl Adapter (t cater fr integratin with 3 rd party systems) Crprate Actins Mdule Mney Market Operatins Mdule Installed Installed Installed T be installed, 2 nd Phase T be installed, 2 nd Phase

15 Relatins with Market participants and ther key stakehlders Central Bank 14 Stckbrkers CMA Small Systems Securities Cmmissi n 5 Custdian s CDC 2 Settlement Banks Stck Exchange 3 Majr Transfer Secretaries 67 Listed Cunters

16 CSD Update - Dematerialisatin Prgress 17 cunters n CSD and 2,640 demat transactins prcessed t date Demat rati f up t 36% with an average f 13.57% achieved in 2 mnths Dminated by institutinal & freign investrs 10 additinal cunters were added n 3 Nv % 35% 30% 25% 20% 15% 10% 5% 0% 1% 36% 35% 23% 21% 6% 5% 3% 1% 2% 0% DEMATERIALISATION RATIO 13% 16% 4% 13% 33% 17%

17 CSD Update Accunts Opened 1005 Accunts pened Dminated by institutinal investrs Evenly split between freign and lcal investrs Lcal 51% Split by Residence Freign 49% Investr Type N. f Accunts %age Pensin Funds % Crprates 57 6% Individuals % Insurance 24 2% Unit Trust Funds 21 2% Other Institutinal - Lcal 30 3% Other Institutinal - Freign % Ttal Accunts 1, %

18 Delays in the Implementatin f a CSD Lack f a Legal Framewrk Securities Act Prmulgated in 2004 Archaic Cmpany s Act that des nt recgnize a paperless share certificate Securities & Exchange Cmmissin established in 2008 Funding f the Prject Gvernment cnstrained Finally reslved that the Prject Tender be awarded t a private cnsrtium able t prvide a turnkey slutin Gvernment smersaulting Wanted a piece f the pie intentins made knwn after tender award Delays emanating frm prtracted discussins surrunding Sweat equity and Signing f a sharehlders Agreement

19 Majr Paradigm Shift Implementatin f a beneficiary wnership mdel? Instigated by the SECZ All unidentified sharehlders passed n t ne specific custdian Implementatin f the Custdial Centric Mdel Mving away frm the Brker Centric Mdel Regulatr apprved the CCM in Cmpliance with the requirements f the Securities Act. 5 Custdians and CDC s license allws Mving away frm a Settlement cycle f T+ 7 t T+5 Targeting T+ 3 by June 2015 Intrductin f efficiencies and reductin in cunter party risks Intrductin f DvP1 settlement and targeting t migrate t DvP2 by June 2015

20 Lessns learnt Prir t the Prject Implementatin Onbarding f cunters n a phased based is the ideal D nt bite mre than yu can chew, implement n a phased basis N implementatin n a whlesale basis One certificate at a time nt the CSD Garbage in garbage ut Manage market resistance by ensuring buy-in at every stage Reslutin thrugh stakehlders sign ffs Prject Gvernance audit came ut psitive

21 CDC Custdial Services Brker-Cntrlled Mdel Offering a Brker-cntrlled Custdial Mdel in partnership with CBZ Bank Custdial Services and ZB Bank Custdial Services. Prduct meant fr retail investrs whereby investrs access Custdial Services at affrdable rates. Mdel invlves investrs accessing the Custdian via preferred brker. N mnthly r annual fees fr the investr. Transactin csts upn trading ($2,00 per transactin r up t 0.05% f the market value f the trade, whichever is higher)

22 Lking Ahead Phase 1 has nw been cmpleted t handle equities Integratin f the CSD with the ATS Phase 2 will fcus n Warehuse Receipts Securitizatin Onbarding Fixed Incme Instruments Derivatives Other Services CDC is allwed t d Transfer Secretarial Services Fully fledged Custdial Services Archival