Muscat Clearing & Depository Company(S.A.O.C)
a
March 08, 2014
19th AMEDA Meeting Muscat, Oman
Agenda
Market Infrastructure
MCD – Historical Overview
Roles & Services
Developments
New MCD System – Overview of changes
Key Statistics
Market Infrastructure
Capital Market Authority
Regulatory Body
Muscat Securities Market
Exchange
Muscat Clearing & Depository Co.
Clearing & Settlement Depository & Registration
Services
Market Intermediaries
Brokers, Custodians, Securities Firms,
Issuers
Other Entities
Insurance & Investment Cos.
3
Muscat Clearing & DepositoryHistorical Overview
The Depository was established by way of a Royal Decree in 1998
Set up as a closed join- stock company
Authorized capital is Rial Omani 2 million
Ownership patterno 60% - Muscat Securities Marketo 40% - Banks, Investment & Brokerage firms
The Board of Directors is constituted by representatives from CMA, MSM, Banks & Investment as well as brokerage companies.
Sole Depository for Sultanate of Oman for all listed companies
4
Roles & Services MCD acts as a Central Securities Depository & also provides
Clearing and Settlement services for all trades executed on MSM
Provides various Depository related services:oIPO management oCorporate ActionsoTrustee Services [for Corporate Bonds]oManages AGMs & EGMsoShareholder Balance TransfersoManages Investor Trust Fund
Manages subscription and redemption of Mutual funds
Facilitates Pledge and Lien on securities
Manages Settlement Guarantee Fund
Acts a National Numbering Agency and issues ISINs
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MCD Services
MCD
CMA Services
MSM Services
CBO Services
Broker Services
Investor Services
Issuer Services
Custodian Services
Lenders Services
6
Key Developments
Investors
2000 Investor Database precisioning
2004 UnClaimed Fund initiation by MCD
2007 eCard [Muhfazati] launched
2007 KIOSKs service launched
2008 Call Centre set up
2008 WAP & SMS Service introduced
Issuers
2002 Trustee Services for Corp Bonds
2003 Introduction of AGM Services
2004 Corporate Benefits for Govt Bonds
2005 Dividend distribution direct credit
2008 ISIN Numbering as a NNA
2013 Decentralization Invitation printing
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Key Developments
Central Bank
2003 Govt Bonds holdings with MCD
2005 REPO trades with CBO
2006 CBO acts as Settlement Bank
2006 RTGS link for cash settlement
2011 DepoX Interface for REPOs
2011 DepoX Interface for Govt Bond IPO
Custodians & Brokers
2006 Authorization [blocking] module
2006 Tight coupling with Trading System
2009 Automation of pending trades info
2010 Online tracking of short sells
2010 New Custodian Module implemented
2012 Interest for Bonds – automated info
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Key Developments
Other - Business & Technical
2011 SGF handling by MCD
2011 Revised C&S regulations
2011 Data centre set up in new building
2011 Participation in e-Govt initiatives
2013 Migration to advanced servers
2013 1st Sukuk listing
2014 New CSD System by Q4
2003 IT department set up
2004 CSD system transitioned from MSM
2004 1st Website of MCD launched
2005 IPO Module implemented
2006 Automated Unclaimed Fund Process
2007 e-Services introduced
2008 Transitioned C&S activities from MSM
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Investor [Buyer]
Investor [Seller]
Broker [Buyer] Broker [Seller]MSM
MCD
Buy Order
Sell OrderBuy
OrderSell
Order
Trade Data
Authorization
Trade & Settlement data
Trade & Settlement data
Central Bank
Funds Settlement using RTGS
Commercial Bank
Commercial Bank
Funds Settlement data
Funds Settlement data
Funds Transfer
Funds Transfer
Note:Settlement Model : BIS Model 2Settlement Cycle: T+3 for Equities
Fund
s Sett
lemen
t ins
tructi
ons
Fund
s Sett
lemen
t ins
tructi
ons
Trade, C&S process – Overview
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New MCD system – Overview of changes
State of-the-art systemComponent based Architecture
Multi-tiered [front-end, application, database....]
Latest Technology
Platform independence
Object oriented development
Phase 1 changesNew Investor Account Structure
Enhanced DVP
Advanced Custodial Trade processing
Multiple Settlement Sessions
Automated Close-outs
Technical Overview Functional Overview
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New MCD system – Overview of changes
ExistingPre-validation with tight coupling with MSM
Single Settlement session per day
Settlement responsibility [only Brokers]
Custodians not part of C&S process managed by MCD
CA – Dependencies & manual handling of fails
NewFlexible Account Structure with Transfer facility
Multiple settlement sessions per day with enhanced DVP
Settlement responsibility [any clearing member]
New process & Custodians to join as Clearing members
Automated Corporate Actions processing
Moving From Moving to
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New MCD system – Future changes
Phase 2
Securities Lending & Borrowing
Risk Management
Collateral Management
Cash Settlement [Power of Attorney Model]
Direct ACH Participation
SWIFT messaging & Interface
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e-Services
Shareholder name
My portfolio cards to Investors to access portfolio info thru’ KIOSK machines
Direct system link for custodians
Single PIN to access all the portfolio information thru’ Website and KIOSKs
Direct transfer of dividends and other receivables in the investor bank accounts
SMS service for the follow up of various services provided by the company
WAP service provider for the investor portfolio information
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Participant Channels
Brokerage Firms /Trusts
Participants Channels MCD
MCD SystemWeb Based Access
WAP
SMS
Individual / Corporate Investors
CustodiansProprietary
Interface
Phase 1 Phase 2
& Banks
KIOSK
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Key Market Statistics2013 2012 % Change
Number of Shares traded in million 7949.20 4319.19 84Turnover in RO million 2208.22 1025.40 115
Number of Bonds traded in million 213.70 23.00 829Turnover in RO million 46.87 40.43 16
Total Turnover of Trading in RO billion 2.26 1.07 111Daily Average Trading in RO million 9.17 4.28 114Number of Trades ('000s) 457 328.8 39MSM 30 Index 6,834.56 5,760.84 19Market Capitalization in RO billion 14.16 11.67 21Foreign Participation (%) 20 20 -
% C
hang
e
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Key MCD - Statistics
Key Statistics – Managed by MCD
Details As of Feb, 2014
No. of Investor accounts managed 389,000
No. of Brokers & Custodians 27
No. of instruments under custody 309
Assets under Custody [RO billion] 14.97
Market Value of Pledged shares [RO billion] 1.77
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CA Cash Benefits – Managed by MCD
Increase in Companies > 622% Increase in Amount > 1579%
Increase in Bank Transfers > 4845% Decrease in Cheque Amount > 15%
More than 1 Billion USD cash distribution handled in 2013 18
Major Milestones
20th May –
1st Day of Trading at MSM
Depository depart-ment
created in MSM
Royal decree to
form MCD as a
closed company
1st Feb – MCD starts
operating as
company
MCD distributes Dividends
for the first time
Investor Number
mandatory + largest
IPO
Clearing & Settlement functions transitioned from
MSM
Name changed to MCD
from MDSRC + New logo
Changing to new MCD
system from Atos
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Future Plans
Implementing a highly automated state of the art Clearing, Settlement & Depository system
Facilitate Securities lending & borrowing transactions
Introduce advanced Risk management
Introduce e-Voting & e-IPO processes to facilitate market players
Implementation of SWIFT messaging
Adopt the global best practices and align with international standards on a continuous basis
Facilitate easy introduction of new products and services
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