The Central depository (CD) was established as a division of the Exchange in the same year of its establishment. The division is licensed under Savings and Transitional (Schedule 1 subsection 5) of Financial Services Act, 2011. It functions like a bank with the exception that it deals with securities and not cash.
CD completed dematerialization of physical shares certificates in 2007 and all records of share ownership are now maintained digitally.
The CD maintains 47,864,670 shares of 20 listed companies as recorded on 31st December, 2012 and the total outstanding bonds includes both the Government and Corporate Bonds, issued in the past years accounts for 4,263,038 units worth Nu 4,263.04 million. So far till December, 2013 bonds worth Nu 1, 279.09 Million has matured.
The main function of CD is to maintain the share registry. Besides equities, the division also maintains the debt instrument such as bonds. Further, the duty of off-market transactions such as intra, inter transfer of shares and also the non-commercial transactions are carried out by the division.
The RSEB Clearing and Settlement House (CSH) was established as a division of RSEB in March 2012 and licensed as per the Savings and Transitional (Schedule 1 subsection 5) of Financial Services Act, 2011.
The main objective of establishing CSH is to guarantee the settlement for all members, to act as a legal counterpart to all trades and control risks associated with the settlement of transactions. It acts as a link between the Depository and the Clearing Bank.
A successful trading requires proper clearing and settling of transactions within the given time frame. The clearing system maximizes the efficiency of settlement of trades, minimizes the risk of financial loss from delays to settle trades and mitigates the risk of settlement failure. So, all trades in equity securities are settled within the trade cycle of two business days after trade date (i.e. T+2).
The main responsibility of clearing and settlement includes matching, comparison (clearing) and settlement.
As defined, clearing is a process of transmitting, reconciling and in some cases, confirming payment order instructions prior to settlement, possibly including the netting of instructions and the establishment of final positions for settlement.
The completion of a transaction, wherein the seller transfers securities or financial instruments to the buyer and the buyer transfers money to the seller is called Settlement.
The Trading and IT Division was established together with the company in 1993 to provide platform to the buyers and sellers to transact their securities. The division is mainly responsible to ensure smooth operation of trading engine and other auxiliary components of the integrated system. Modern Stock Exchange is a network of computers linked together using a common trading platform of the Exchange. It is a network of all the major players (Investment Banks, Stockbrokers, Hedge Funds, Mutual Funds etc.) who can view the same information for financial analysis and execute trading through the trading platform.
The facilities provided by the new ATS of RSEB are not only confined to the trading hall but it also allows individuals to trade online through the internet. It is user friendly and provides comprehensive information required for trading. Investors or clients can enter their order details through the web from anywhere in the world, provided they have an account with the broker.
The ATS platform provides a comprehensive user interface to monitor the market statistics, a broad interface to monitor the best orders and the best price in the market at any time and avails of different reports to keep users update regarding status of orders placed by them. The orders are transmitted on real time basis to the trading engine.
It also validates the orders with its collateral and security requirement by synchronizing the orders with the Brokers Back Office System (BBO) and Electronic Depository System (EDS). After validation, the orders are transmitted to the matching engine where the specific trades are confirmed. Then, the information for cash and security settlement is transmitted to respective systems. The Clearing and Settlement System (CSS) is used by the settlement bank to confirm the settlement of cash among the brokers and the information will be automatically transmitted to the Electronic Depository System (EDS) for settlement of securities.
The Listing Division was established in the same year the RSEBL started its operation in the year 1993. The main function of the listing division is to list new companies subject to their qualification as per the Listing norms.
The division ensures compliance to the listing norms by listed companies and dissemination of timely information by the companies to the general public to maintain transparency in the capital market.
Listing is defined as the grant of a listing and permission to deal in securities on the Exchange for the following purposes: