Central Securities Depository (CSD)

Provides committed, joint transfer of funds and securities in real-time and eliminates risk to buyers, sellers and the Central Bank…


The CSD Solution

The Montran Central Securities Depository (CSD) Solution consists of modules and interfaces designed to offer a complete range of depository functions. More specifically, the CSD fully manages the:

  • Both fixed income securities (bonds, bills, notes, certificates of deposit) as well as equities (stocks, cross listed securities) in local and foreign currency
  • Government and corporate issuers (including paying agents facility)
  • Auction master data registration
  • Competitive and non-competitive bidding
  • Award algorithm simulation and execution
  • registration and execution of auction results on the primary market;
  • Direct participants (banks, non-banking financial institutions, corporates) and individual investors (holder and beneficial owner records for physical persons and legal entities)
  • DvP settlement for over-the-counter secondary market outright sales
  • DvP settlement for trade results coming from the Montran Trading System or other external trading platforms
  • FoP (Free of payment) and PwD (Payment without delivery)
  • Registration / substitution / release and execution of pledge contracts
  • Registration and execution of collateral to support settlement of ACH sessions
  • Registration / substitution / margin call operations for repurchase agreements
  • Collateral management and open market operations
  • Automatic calculation and execution of interest, coupon and bond factor corporate actions
  • Full management of partial and total securities redemption
  • Automatic calculation of dividends, DRIP, stock/reverse split, stock bonus/buy-back
  • Securities income (interest, capital gain and secondary market profit) taxation calculation and automatic collecting mechanism based in taxation schemes and threshold values
  • Securities income taxation calculation and automatic collecting mechanism based in taxation schemes and threshold values.
  • Support for both fungible and non-fungible concepts
  • Automatic billing calculation and collection
  • On-demand reporting facility (PDF, XLS, CSV)
  • Alerts and notifications

The Montran CSD implements a dedicated interface with the Cash Settlement System (RTGS or ATS) to support the settlement for the cash-leg of securities transactions on both primary and secondary markets, BIS principles for DvP.



The CSD Core Principles & Standards

The Montran CSD fully complies with the following principles and standards:

  • The core principles of Payment Systems set out by the Bank for International Settlement (BIS);
  • The BIS principles on netting, clearing and settlement;
  • The BIS principles on Delivery versus Payment Model 1 (and 2);
  • The relevant standards of the International Standards Organization (ISO), such as:
  • o ISO 17799 – Security
    o ISO 9362 – Bank Identifier Codes
    o ISO 6166 – ISIN (International Security Identification Number)
    o ISO 3166 – Codes (Countries)
    o ISO 4217 – Currency Code List
    o SWIFT ISO 15022 and 20022



Access to Information

Montran CSD system user interface is fully on-line and entirely web-based. The users can access the CSD functionality and control all aspects of the system using a web-browser, login credentials, and navigating through the system menu and associated screens.


The system will produce responses to inquiries in an HTML format (e.g. list of items with reveal information available, account statements with opening current and projected balances, etc).


Reporting

The system reports are generated in PDF (Portable Document Format), XLS (Microsoft Office Excel) and CSV (Comma-Separated Values) format.



The CSD Participants

All direct CSD Participants (Central Bank, Ministry of Finance, Commercial Banks, Securities Dealers, Investment Funds, Conglomerates, etc) can assume the role of issuer of financial instruments and can manage an unlimited number of individual securities client accounts (physical persons of legal entities).

  • Features
  • Modules
  • Security

Features of the Montran CSD

  • Auction module provides complete auction processing and management
  • Scalable to any size: from a few transactions to tens of thousands a day
  • Schedules and routes Interest and Redemptions payments
  • Provides multiple interfaces to national payment systems
  • International transfers, including payment notification
  • Standardized interface to back office systems
  • Real-time position monitoring
  • Consolidation of multiple positions and exposure
  • Parameterized standard and special conditions
  • Commission and charges
  • Currency conversion
  • SWIFTNet ready
  • e-payments ready
  • Full audit and reporting
  • A multi-currency and multi-lingual system

CSD Core Modules

  • Auction Platform - facilitates the definition of the auction master data, the competitive and/or non-competitive bidding process, the simulation, execution and authorization of auction results based on the award algorithm implemented, the automatic generation and processing (settlement) of primary market operations together with full primary market on-demand reporting.
  • Workstation - facilitates the entry of SWIFT MT and MX securities messages.
  • Access & Routing - facilitates the automatic matching based on parameterized matching criteria in order to generate over-the-counter operations
  • Accounting Space & Settlement - facilitates the full management of securities accounts and final and irrevocable settlement of securities transactions according to DvP Model 1 principles;
  • Billing - facilitates the management of charge rates for all operations performed in CSD with automatic collection facility in RTGS;
  • External Interfaces - dedicated RTGS, ACH, GL interfaces;
  • Taxation - securities income taxation calculation and automatic collecting mechanism based in taxation schemes and threshold values.
  • T2S Compliance - facilitates the settlement optimization mechanism introduced by T2S (partial settlement, hold instructions, recycling, linked instructions, etc.) as well as MX ISO 20022 based CSD-T2S interface.

CSD Security

  • System security based on PKI with smart card access
  • Absolute control over access and processing of transaction messages
  • Incorporates the highest levels of SWIFT and SWIFTNet security
  • Protect against systemic Risk and Fraud with real‐time Delivery versus Payment
  • Better control over holdings and asset ratios by the Central Bank

Architecture
  • Based on open system architecture
  • A standard browser based "thin client" user interface
  • Server application components written in Java and running in an enterprise environment, Java EE 5.0 application server
  • Interoperability through the use of standardized Java API (JDBC, JMS, JTA, JCA), Interface adapters, and SOA integration
  • Runs on any platform supporting Java™, including: Windows, UNIX, Linux, AIX, Mainframes
  • Uses any JDBC compliant RDBMS, including MS SQL, Oracle, Sybase, etc.