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Tehran Stock Exchange Service Company (TSESC):Introduction and Post-Trade Responsibilities
September 19, 2005
September 19, 2005 TSESC
CONTENTS
Brief HistoryOwnership and GovernanceServices ProvidedType and Form of SecuritiesHolding or Ownership structureOrder to Final Settlement ProcessRisk Control & ManagementDevelopments
September 19, 2005 TSESC
BRIEF HISTORY
Started its operation as a subsidiary of National Informatics Corporation (NIC) in 1984
Originally maintained TSE’s HW & SWIncorporated in 1994Additional services
September 19, 2005 TSESC
OWNERSHIP AND GOVERNANCE
Owned by TSE and its membersFive member Board of Directors
Representatives of TSERepresentatives of brokerage companies
Managing Director
September 19, 2005 TSESC
SERVICES PROVIDED
Maintain HW & SWClearing & settlementDepository and custodyInformation and supporting servicesOther services
September 19, 2005 TSESC
TYPE AND FORM OF SECURITIES
Eligible securities: EquitiesCorporate bonds
New securities: Derivatives, Mutual Funds, and Real Estate Investment Trusts (REIT)
Form of tradable securities: Immobilized or de-materialized
September 19, 2005 TSESC
HOLDING SYSTEM
Existing system: Direct Holding SystemShareholders and issuing companies have
direct relationshipTSE maintains position of all shareholdersShares can be bought or sold through any
broker
September 19, 2005 TSESC
cont. HOLDING SYSTEM
New holding system to be implemented: Hybrid Holding SystemCombination of direct and indirect systemShareholders would relate to the issuing
companies through the brokersTSESC would maintain position of all
shareholdersNew procedure: movement of client position
from one broker to another
September 19, 2005 TSESC
ORDER TO FINAL SETTLEMENT PROCESS
Order placementPhysical presence of buyer & seller at
brokerage officeBuy and sell orders are filled outProvision of documents
Buyer: birth certificate and receipt of moneySeller: birth certificate and physical certificate
Depository of issued certificatesTrade matching
September 19, 2005 TSESC
Cont. ORDER TO FINAL SETTLEMENT PROCESS
Share delivery Immediate (T+0) movements of shares to a blocked
buyer account Shares cannot be traded before settlement on T+3 Holding announcements are printed Physical presence of buyer
Payment Netting happens between members at T+3 TSE becomes CCP with no guarantee Physical presence of seller at brokerage office
September 19, 2005 TSESC
RISK CONTROL AND MANAGEMENT
Price limitsShort selling not allowedBrokerage collaterals - minimalNetting for payment obligations
TSE acts as CCP with no guaranteeNew mechanisms may be introduced
September 19, 2005 TSESC
DEVELOPMENTS
New Trade, Clearing, and Settlement Solution Provider: ATOS-Euronext Study phase has been completed New solution would become operational in 2006
New CDS company Ground work is complete May transact post-trade processes for other Exchanges (i.e., TME, IACE,
& PE) New instruments OTC market (non-listed companies) Trade through other currencies (Kish Island) Complete immobilization or dematerialization Allowing short selling Lending and Borrowing Market
