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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2006
TEHRAN STOCK EXCHANGE SERVICES COMPANY (TSESC)
AFFILIATE MEMBER
TSESC is the main contributor in the
development and implementation of
international standards in Iran.
Morteza Khazanedari
Managing Director
There have been several developments within
TSESC since March 2006:
The study phase to implement the new trade and
post-trade solutions has been completed.
AEMS is the provider of the solutions that will be
used for electronic trading, clearing, settlement,
depository, registry, market control, and risk
management activities. TSESC is leading the
implementation project. The trading system is due
to come online in the summer of 2007. The live
date for the post-trade solution is planned to be in
early 2008.
During the implementation of the new core trade
and post-trade solutions, TSESC is working with
major brokerage firms on the implementation of
solutions for them.
In the first few weeks of this summer, a new
company named CSD Iran has been established
with the responsibility for all post-trade activities
through out Iran. TSESC was the main contributor
to this newly established company since most of
the activities were the responsibility of TSESC
before hand. The post-trade activities of equity and
corporate bond markets will be handled by this
company. The post-trade of other markets
including the Tehran Metal Exchange and the Iran
Agricultural Commodity Exchange may become
the responsibility of this company.
The plan is to introduce financial and commodity
derivatives markets in TSE in the near future.
TSESC is the main driving force for the introduction
of these markets and also their processing.
TSESC is an active member of a consortium with
the responsibility to establish the Iranian Petroleum
Exchange.
TSESC has received the initial agreements for the
development of a Lending and Borrowing (LNB)
Market for equities. The initial structure and
business processes for the LNB market has been
identified. TSESC is in the process to develop the
infrastructure and link it with other activities.
TSESC is the main contributor in the development
and implementation of international standards in
Iran. TSESC is the main driving force to implement
a DvP Model2 for the equity market. In addition,
the new CSD Company will become a CCP of the
equity market by 2008. TSESC is providing all the
needed infrastructure and risk management
mechanisms for them.
TSESC has been the main driving force and
technology provider in the geographical expansion
of the Tehran Stock Exchange (TSE). The latest
trading floor was inaugurated in the central city of
Arak in August 2006.
General Information
Tehran Stock Exchange Services Company
(TSESC) is a subsidiary of the Tehran Stock
Exchange (TSE). TSESC was established on June
1994 as an independent company owned by TSE
and its members. The TSESC’s main function is to
develop, maintain, operate, and promote systems
for all stages of the trade-cycle services in Iran.
Specifically, TSESC is responsible for:
• Providing clearance, settlement, and information
services
• Providing custody and asset services
• Maintaining all hardware and software used for
trade and post trade activities
• Developing and enhance existing software
applications
• Providing consultancy and technical advice
• Functioning as the National Numbering Agency
of Iran
Services Provided
Trading
Maintain Automated Trading System (ATS)
Disseminate trade information to interested parties
Clearing and Settlement
Handle clearing and settlement activities
Facilitate book-entry for transfers
Maintain Direct Holding
Depository and Custodial
Manage deposits and withdrawals
Develop and maintain a registrar system
Process hereditary, legal, and other transfers
Handle Corporate Actions
Information and Supporting
Provide operational services
Manage operational risks
Others
Provide consultancy
Manage the data centers
Implement specialized software
Brief History
TSESC started its operation as a subsidiary of the
National Informatics Corporation (NIC) of Iran in
July 1984. Originally, TSESC developed,
maintained and operated the computerized system
of TSE used for trade and post-trade activities.
In June 1994, TSESC was incorporated as an
independent company under the ownership of the
TSE, its members, and NIC. Currently, TSE and its
members are the sole owners of TSESC.
Form of Securities
Dematerialized
Form of Settlement and Transfers:
Book-entry
Legal Status
Private Joint Stock Company
Settlement Period
Equities: T+3
Corporate Bonds: T+1
Type of Commerc›al Entity
Private sector for-profit company
Does Tsesc Act as a Central Counter Party
No. However, the plan is to introduce a CCP
organization for the Iranian markets in early 2008.
TSESC is driving force for this undertaking.
Regulated By
Iranian Bourse Council
S›ze Of Guarantee Fund
(as of December 2005)
Ownership
Owned by the Tehran Stock Exchange (TSE) and
its members.
Memberships to International Organizations
Affiliate Member of the Federation of Euro-Asian
Stock Exchanges (FEAS)
Association of National Numbering Agency (ANNA)
Board of Di›rectors: 11 Members
Representatives of the TSE and member brokerage
companies
Future Outlook
From March 2006 to March 2007, TSESC intends to:
• Lead the implementation of a new solutions
• Assist brokerage companies for implementing
back-office solutions
• Contribute to the creation of an independent
company to be responsible for all post-trade
activities
• Contribute to in the introduction of new instruments
• Assist in the creation of the Iranian Petroleum
Exchange
• Champion the creation of a Lending and
Borrowing market
• Contribute to the development and implementation
of international standards
• Initiate studies and efforts to introduce CCP
• Lead the geographical expansion of TSE
* Please refer to page 130 for the Iran country report.
CONTACT INFORMATION
Contact Name Mr. Houman Mansour E-mail houman.mansour@tsesc.com Website www.tsesc.com
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