Details of stock exchange organization approvals to attract investors

Details of stock exchange organization approvals to attract investors

Details of the approvals of the Exchange Organization to attract investors: The CEO of the Central Depository Company, explaining the approval of the Exchange Organization to attract domestic and foreign investors, said: “The blue model” will be implemented in the Iranian economy, which will create a change in the Iranian capital market.

Mohammad Reza Mohseni, stating that in the recent meeting of the board of directors of the Exchange Organization, to accelerate the attraction of domestic and foreign investors, the “blue model” has been approved by members, added: Will be created in the Iranian capital market.

Explaining the “blue model”, the CEO of the Central Securities Depository and Clearing Company said: “In other countries of the world, regardless of the different models that exist in terms of how the clearing house operates, about membership in this room as a member and mediator of clearing standards.” There are sensitivities. These sensitivities and strictures have a certain logic, and that logic is the need to conclude and finalize transactions in a safe and secure environment to prevent any disruption that could lead to an exacerbation of systematic risk.

Mohseni continued: “According to this, the members of the clearing house in other capital markets are generally among the financial institutions that have acceptable financial wealth.” However, in many capital markets, the role of party to the central transaction is played by the central depository and settlement institutions or another financial institution to cover at least the existing settlement risk.

Samat’s CEO explained: In the years after the passage of the Securities Market Law, the situation has been different for the Iranian capital market, which has had significant achievements. In this market, brokers play a significant role and in addition to intermediation in transactions, they are responsible for various financial services from investment consulting to asset management and portfolio management and settlement of transactions of their clients with the clearing house.

He added: “Brokers in the Iranian capital market are fully supervised and regulated and are very agile due to the amount of capital and their small size.” Although this is a good thing, but from the point of view of membership in the clearing house and the risk of settlement, especially considering the time interval between monetary settlement and the time of the transaction, investors and especially foreign institutional investors want another possibility with the amount of risk. Be less.

Mohseni continued: in order to respond to this demand and with the aim of strengthening the members of the capital market clearing house, the Central Depository Company has long ago put a plan on its agenda to help the country’s banking system and interested and qualified commercial banks, while Reduce transaction settlement risk to increase settlement efficiency. Accordingly, the clearing bank acts on behalf of the brokers under its agency by settling the obligations arising from transactions with the clearing house. In this model, in fact, the operating bank plays the role of the bank in charge of the account.

He added: “The issue of the activities of the institutions in charge of the account, especially after Borjam, has been considered in various circles and discussions.” In this regard, it is important to note that although many custodial services in the Iranian capital market are provided by the Central Depository Company (from securities lending to safekeeping, corporate actions, corporate services and reporting to investors ), Other custodial services such as asset management and the like are also provided as appropriate by other capital market financial institutions.

Samat’s CEO added: “But so far, the institution in charge of the independent account has not been active in the Iranian capital market.” Since in many countries these types of financial institutions, especially international ones, support the affairs of investors, especially micro-investors, there has long been a demand from foreign investors for the operation of such financial institutions in the Iranian capital market. .

He stated: The Central Depository Company, as a provider of capital market infrastructure services, following this demand of investors, presented a model to the Board of Directors of the Exchange and Securities Organization in cooperation with the Deputy Supervisors of Stock Exchanges and Markets and the Supervision of Financial Institutions. Which makes it possible to settle the transactions of eligible investors (the terms of which are determined by Samat) through the banking system in cooperation with the triangle of Samat, the broker and the settlement bank.

Mohseni continued: in order to respond to this demand and with the aim of strengthening the members of the capital market clearing house, the Central Depository Company has long ago put a plan on its agenda to help the country’s banking system and interested and qualified commercial banks, while Reduce transaction settlement risk to increase settlement efficiency. Accordingly, the clearing bank acts on behalf of the brokers under its agency by settling the obligations arising from transactions with the clearing house. In this model, in fact, the operating bank plays the role of the bank in charge of the account.

He added: “The issue of the activities of the institutions in charge of the account, especially after Borjam, has been considered in various circles and discussions.” In this regard, it is important to note that although many custodial services in the Iranian capital market are provided by the Central Depository Company (from securities lending to safekeeping, corporate actions, corporate services and reporting to investors ), Other custodial services such as asset management and the like are also provided as appropriate by other capital market financial institutions.

Samat’s CEO added: “But so far, the institution in charge of the independent account has not been active in the Iranian capital market.” Since in many countries these types of financial institutions, especially international ones, support the affairs of investors, especially micro-investors, there has long been a demand from foreign investors for the operation of such financial institutions in the Iranian capital market. .

He stated: The Central Depository Company, as a provider of capital market infrastructure services, following this demand of investors, presented a model to the Board of Directors of the Exchange and Securities Organization in cooperation with the Deputy Supervisors of Stock Exchanges and Markets and the Supervision of Financial Institutions. Which makes it possible to settle the transactions of eligible investors (the terms of which are determined by Samat) through the banking system in cooperation with the triangle of Samat, the broker and the settlement bank.

Mohseni pointed out: This model was approved in the form of amending Article 17 of the Instruction on Registration, Deposit, Settlement and Settlement in the 424th meeting of the Board of Directors of the Exchange Organization to provide a new opportunity to attract foreign investors in the Iranian capital market.

He added: “In order to implement this model, Samat Company intends to provide the technical, legal and coordination necessary infrastructures for the implementation of this model in the shortest possible time and with the cooperation of the banking system, brokers and with the support of the stock exchange organization and other capital market elements.” Provide. It is hoped that with its implementation, an effective and serious step will be taken to develop foreign investment as well as the provision of custody services in the capital market.

The text of the amendment to Article 17 of the Instruction on Registration, Deposit, Settlement and Settlement, which was approved at the 424th meeting of the Board of Directors of the Stock Exchange and Securities Organization, is as follows:

Note 1: The responsibility of settling the price of traded securities (buying and selling) of investors eligible to use the services of the account trustee will be the responsibility of the clearing bank, which is introduced in writing by the customer-selected broker to the Central Depository and the credit ceiling allocated to each The customer is determined and announced by the settlement agent bank. The conditions of this group of investors are determined and announced by the Central Depository Company every year. The settlement of the price of the traded securities in excess of the credit ceiling declared by the bank will continue to be the responsibility of the trading broker.