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Security deposit is the conversion of physical security certificates into an electronic form / balances in the SDSC systems, It allows deposit of investor’s certificated securities through SDSC Members / Depository Participants into the Central Depository systems.
At the present, all securities at the SDSC are kept in the dematerialised form, i.e. all issuers have deposited security holdings of their shareholders at the SDSC. The dematerialised form allows selling or buying of securities at the Somali Stock Exchange and other depository services to be facilitated in efficient manner.
The SDSC Members / Depository Participants are registered institutional members of the SDSC R who open and maintain investors’ SDSC Accounts on behalf of the investor. Before investor buys securities through the primary market “an Initial Public Offering” (IPO) or on the secondary market “at Somali Stock Exchange PLC”, the investor must open a SDSC Account through a SDSC Member / Depository Participant.
Transfer of securities
The SDSC also facilitates transfer of securities from an investor’s Account to another in case of death, bankruptcy or on any other operation as mandated by law. The transfer process could take between 1 week to 12 weeks.
Amendment/ Change of SDSC Account Details
The Account holder who wishes to change details of his/her Account i.e. Address, Names, telephone number or Bank Account details, may through a SDSC Member / Depository Participant submit an Amendment form to the SDSC for change to be effected.
Clearing and settlement
The SDSC s’ clearing and settlement process facilitates delivery versus payment of securities traded at the Somali Stock Exchange, where by an electronic debit of securities sold and credit of securities bought takes place via the SDSC system and respective funds transfers takes place via Central Bank and other Settlement Banks.
There are various internationally recognised operational models of Delivery versus Payment (DVP) of securities. The SDSC uses DVP Model 2, where by securities are settled on the CSD system on gross basis (trade for trade processing) while funds are settled on net basis through settlement banks. The SDSC uses Central Bank money to complete the settlement process.
All settlement participants (excluding Custodian Banks) are required to open a settlement account with a settlement bank. Custodian Banks participate in the settlement process as Settlement Banks. The Custodian Bank are members of the Somali Stock Exchanges Nominated Advosirs and their details can be found on our website. This facilitates funds transfer amongst settlement participants to take place on settlement date and simultaneously securities transfer on trade by trade basis on the CSD system. This ensures strict delivery versus payment.
The CSDR settles Equity trades on T+3 and Bonds trades on T+1.
The Custodian Bank are members of the Somali Stock Exchanges Nominated Advosirs and their details can be found on our website. www.somalistockexchange.so/nominatedadvisors
Any institution that issues financail securities is known as ‘Issuer’ by the SDSC. Securities admitted to the CSDR are electronically deposited into the CSD system on behalf of issuer’s shareholders and are available to account holders. Issuers may issue securities through Initial Public Offerings, Right Issues or Bonus Issues. Issued securities can be Shares/Equities, Corporate Bonds or Government Bonds.
Other than electronic crediting of securities into investor’s accounts during Initial Public Offerings, Right Issues or Bonus Issues, the SDSC also advises issuers on schedule of events and sequence of dates before publication of a corporate action to ensure that the sequence of events and timings are in accordance to the trading cycles.
The Issuer informs the Somali Stock Exchange and the SDSC in writing of all important dates with respect to dividend payment. On Books Closure Date / Register Closing Date, the SDSC provides the Registrar with the definitive and authentic record of registered securities holders (Register). The Shares Registrar then effects payments of dividend to the respective shareholders