Soci

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Société Interprofessionnelle pour la
COmpensation et le DEpôt des VAleurs Mobilières
Functioning of the Tunisian Central securities
depository and the company for clearing and
settlement of securities
Presented by Mrs Kaouther RAACH
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Agenda

1. Brief presentation of the company
2. To be member
3. Activities and services
4. Perspectives
5. Statistics

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Background

• Sticodevam was established on December 28, 1993
  as a Public company (S.A société anonyme in
  french).
• Its a private company

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Sticodevam Capital 1994

• At the establishments date, Sticodevams capital
  was 160 thousand Tunisian dinars (about 110
  thousand)

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OwnershipShareholding structure in 1994
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The role of Sticodevam

• Sticodevam was approved by the law number 94-117
  published on November 14th, 1994.

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Tunisian financial market organization
CMF Financial market Council Control authority
Issuers
Tunisian Treasury
Primary dealer
Banks
Brokers
Tunisian Central Bank
Stock Exchange
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Current shareholding structure
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Structure of the company

• 19 employees
• six departments
• Admission department (3 employees)
• Settlement and clearing (3 employees)
• IT (5 employees)
• Financial department (2 employees)
• HR and accounting department (2 employees)
• General Administration secretary and reception (3
  employees)
• General Manager who manages the company (1)
• A board of Director s manage Sticodevam.

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Activities Services

1. Central depository.
2. Settlement and Clearing.
3. Management of corporate actions.
4. Management of Treasury Bonds

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Central depositoryMembers

• Brokers
• Banks
• Issuers
• Tunisian Central Bank
• The Treasury

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Condition to be a memberBrokers

• Brokers must be participant and shareholder in
  accordance with the law 94-117 that reorganized
  the financial market.

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Condition to be a member Issuers

• Issuer for equity or bonds listed on stock
  exchange or going to be listed compulsory
• Issuer for equity or bonds that can be listed on
  stock exchange in few times optional

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Condition to be a memberBanks

• There are three kinds of participation for banks
• To be an issuer
• To be a clearing bank,
• To be a bookkeeper for securities bonds or
  Treasury bonds
• Fees 5 thousand dinars per year

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Condition to be a memberOthers

• Primary dealer s
• Central Bank
• Treasury there is an agreement between
  Sticodevam and the Treasury that imposes to the
  Treasury to pay 130 thousand dinars per year for
  all services.

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CENTRAL DEPOSITORYMembership structure
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Securities Admission

• Listed securities
• Bonds
• Treasury bonds
• Short term maturity Treasury bonds (BTC)
• Long term maturity Treasury bonds (BTA)

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Securities managed
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ISIN Numbering

• Sticodevam is the Tunisian securities numbering
  agency.
• Sticodevam is a member of ANNA (Association of
  National Numbering Agencies).
• Sticodevam allocates free of payment the ISIN
  codes which permit the sole identification of the
  securities deposited in its books.
• Sticodevam has diffused 693 ISIN codes.

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Securities form

• All securities hold by Sticodevam were
  dematerialized since march 2000.
• This dematerialization was made by law.
• All securities are in a scripless/electronic form
  on behalf member such as custodians.
• Securities are declared fungible

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Account identification

• Each account is identified at Sticodevam by
• ISIN code,
• Member code,
• Account type code (ordinary securities,
  securities blocked..)
• Holding category Sticodevam is presently
  applying book segregation
• Domestic client assets
• Foreign client assets
• Mutual fund holding
• Own account holding

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Settlement clearing

• Stock exchange transactions
• Treasury bonds market primary and second market
• Refinancing operations (banks with central bank)
  money market and open market

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Settlement clearing cycle

• On 1995 the settlement cycle was T5
• On may, 1999 Sticodevam improved settlement cycle
  it became at T4
• On 1st January, 2003 the settlement cycle was
  improved another time so it passed from T 4 to
  T3.
• Current settlement cycle is T3

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Settlement clearing Function

• Both securities and cash are netted on a
  bilateral basis on a T3, with simultaneous
  netted cash settlement over cash accounts at
  Central Bank.
• DVP

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Settlement clearingstock exchange transactions

• Sticodevam receives
• daily via a dedicated line the exchange
  transactions file from the Tunisian stock
  exchange.
• Sticodevam receives the execution notices from
  brokers holding securities accounts and all the
  movements that affect securities accounts such as
  
• Transfers,
• Rights conversion to shares, ...
• At T1 at 12 p. m

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Settlement clearingstock exchange transactions

• Adjustment between banks and brokers T1 at 12
  p.m. Sticodevam receives a file from banks
  containing all operations.

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Settlement clearingTreasury bonds auction

• Sticodevam treats two kinds of auctions
• Weekly for short term maturity Treasury bonds
• Monthly for long term maturity Treasury bonds

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Settlement clearingSecond market for Treasury
bonds

• Second market for Treasury bonds is an over the
  counter market.
• Participants to this market are banks and primary
  dealers, they deal in this market in accordance
  with an agreement established by the financial
  ministry.
• Its controlled by the Treasury department and
  the financial market council (CMF).

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Settlement clearingSecond market for Treasury
bonds

• The settlement and clearing date for transaction
  deals in the second market depends on the primary
  dealer choice
• T1
• T2
• T3

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Settlement clearingSecond market for Treasury
bonds

• The seller sends a matching order
• The buyer sends a matching order
• The two orders are matched electronically by
  Sticodevams system. If there is any difference
  in the amount, securities number, the order is
  rejected

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Settlement clearingRefinancing operations

• In order to insure efficiency and security of the
  operations, the Tunisia Central Bank uses the
  Sticodevam clearing/settlement system for
  refinancing operations with Tunisian banks.
• these operations have security guarantee
  concerning securities settlement. Treasury bonds
  long term maturity are accepted as a refinancing
  operations guarantee by  Central Bank of Tunisia .

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Settlement clearingRefinancing operations

• Presently, Sticodevam processes refinancing
  operations with maturities between 3 and 7 days
  or three months. One have to notice that
  restitution operation occur automatically.

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Settlement clearingOpen Market

• Central Bank uses Sticodevams settlement and
  clearing for the open market operations.

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Settlement Clearing

• The clearing is done at the Central Bank
• Each broker has a clearing bank
• Each bank gives Sticodevam a permanent
  authorization to be able to debit its account for
  and for the broker cleared for the net cleared in
  the Central Bank

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Settlement clearing

• Securities settlement and cash payment occur the
  same day DVP,
• Guarantee of simultaneous settlement in cash
  (Clearing at Central Bank of Tunisia) and
  delivery of the securities.

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Corporate ActionsDividend payment

• For all securities managed, Sticodevam offers
  direct payment procedure that is an efficient
  service that allows payments to be made on due
  date automatic income payments in Central Bank
• This service includes
• notification of payment and an estimated amount
  to be received three days prior to payment

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Corporate ActionsDividend payment
Balance of securities number to be used for
dividend payment
T - 1
T - 1
T 3
T - 4
T
Payment of the bookkeeper
TRANSMISSION OF THE ESTIMATE AMOUNT TO THE ISSUER
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Corporate Actionsinterest payment

• This procedure is used for paying bonds
  interest,
• Treasury bonds interest and capital redemption.
• The payment is made on due date
• If there are any transactions between D-1 (D
  due date for payment) and D2 Sticodevam
  regulates them.
• Sticodevam uses direct payment via the Tunisian
  Central Bank for the clearing.

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Corporate ActionsCapital increase

• At D date of the capital increase an account
  for rights is created based on the balance of
  each bookkeeper on D-1 ( D due date of capital
  increase)
• Conversion of rights must be done by the
  bookkeeper

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REPORTING

• Since October, 1st 2005 Sticodevam is using the
  web technology to communicate with all members
• A private area was created on Sticodevam web site
  
• Each member access to his personal account using
  an identification code and a password

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REPORTING

• Daily movements report
• Account balance
• Files of movements download
• Files of movements to be transmitted to
  Sticodevam
• Documentation

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(No Transcript)
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NETWORK STRUCTURE
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Perspectives

• Electronic signature
• All communications with members will be base on
  electronic system
• Real time for OTC market repurchase
  agreement, second market for treasury bonds

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StatisticsTransactions number
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STATISTICSSecurities number Treated
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STATISTICSTotal amount Settled for stock
exchange transactions
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STATISTICSTotal amount cleared in the Central
Bank
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STATISTICSNumber of movements
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CONCLUSION

• Three words could define the role of Sticodevam
  
• security,
• efficiency
• transactions guarantee

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CONCLUSION

• Security by insuring the transfer between
  financial intermediaries holding securities
  accounts. Securities transfer is simply a written
  order.
• Market Efficiency by reducing costs and
  operational risks when manipulating physical
  securities.
• Guarantee settlement in cash (Tunisian Central
  Bank clearing) and delivery of the securities are
  simultaneous and irrevocable. In one word, the
  guarantee of the good achievement of the
  transactions.

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THANK YOU FOR YOUR ATTENTION
http//www.Sticodevam.com
E-mail kaouther.raach_at_Sticodevam.com Adresse
92-94 avenue Hedi chaker- 8ème étage 1002 Tunis
belvédère Tel [phone] Fax
216-71-286-842