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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2010MACEDONIAN CENTRAL SECURITIES DEPOSITORY (MCSD)AFFILIATE MEMBERStevan SapceskiExecutive DirectorThe main goal of MCSD is to helpgovernment to keep economic stability, andalso to help investors, custodian banks andissuers by providing fast and reliableservices.Macedonian Central Securities Depository is oneof the central links in Capital Market structure,and as such plays a big role in development ofMacedonian Capital Market.Macedonian economy is small and is under biginfluence of surrounding economies and worldeconomic crisis. The main goal in suchenvironment for Macedonian Central SecuritiesDepository as one of the main financialinstitutions is to help government in its efforts tokeep economic stability, and also to helpinvestors, custodian banks and issuers byproviding fast and reliable services. In year tocome, Macedonian Central Securities Depositorywill focus on ongoing development of newservices.In year 2008, Macedonian Central SecuritiesDepository was helping investors by reducing thecost of settlement of trade transactions by 27%and is hoping that this is good effort in providinga suitable ground to increase market tradevolume.General InformationThe purpose of the Macedonian Central SecuritiesDepository (MCSD) is to establish central securitiesregister comprising all active shares, bonds andother financial instruments in Republic ofMacedonia. This will lead to better access anddistribution of information about the issuers andsecurities to:• Investors• Foreign investors• Holders of restrictive rights• Issuers• Brokers• Macedonian Stock Exchange (MSE)• Pledge Register• Other authorized institutions in accordance withthe law.Regulatory EnvironmentThe MCSD is Self Regulatory Organization, underauthority of Security Exchange Commission.ParticipantsAt present time, there are 22 participants, banksand brokerage houses.Services ProvidedThe MCSD is providing the following services to theparticipants in the operations, issuers and holderssecurities:• recording of the securities in the Depository;• notification of the issuers and holders of securitiesabout the condition on their accounts;• clearing and settlement of the liabilities arisingfrom the transactions with securities;• rendering services connected with the corporateactivities;• other services that arise from the ownership andtransactions with securities, arising from the scopeof its operations.Form of SecuritiesAll securities are registered and dematerialized.Depository ProceduresRecords are kept in the Depository of the issuedsecurities and ownership positions, rights of thesecurities holders, the unique identification of thesecurities and their holders, possible limitations inthe exercise of such rights, rights of third partiesconnected with the securities and other datareferring to such rights, transfer to the securitiesaccounts shall be made and other servicesconnected with keeping records of the securitiesshall be provided. All securities shall be recorded inthe Depository in a procedure, on conditions and ina manner determined with these Rules and with theguidelines of the Depository.ISIN is allocated to all securities upon theirregistration in the Depository. ISIN shall contain dataon the issuer, rights arising for the holders of thosesecurities and other elements of the securities. Theprocedure, conditions and manner of allocating ISINis determined by the guidelines of the Depository.The securities are recorded in special accounts withthe Depository. With the purpose of recording thesecurities, the Depository is opening accounts forthe issuers and holders of the securities.The opening and closing of the securities accounts,recording, changes and deletion of the ownershippositions in the accounts of the securities holders,as well as other actions connected with the changesoccurred in the accounts maintained in theDepository are performed by a sole accountoperator. The manner and procedure of openingand closing an account and the types of accountswith the Depository is prescribed within theguidelines of the Depository.Principles of Clearing & SettlementMain principle of clearing and settlement is deliveryversus payment.Settlement CycleSettlement cycle is usually T+3, but it is possible tosettle transactions from T+1, to T+nClearing & Settlement Procedures• CSD performs the clearing and settlement of thetransactions with securities that were concluded onthe MSE.• The clearing and the settlement of thetransactions are performed in accordance with theprinciple “delivery versus payment”, i.e. the transferof securities related to the transactions withsecurities is performed through a simultaneousexchange of securities and payment. The settlementis performed on gross basis.• In MCSD frame the subject of clearing andsettlement are all the transactions with securitiesconcluded on the MSE.• The MCSD performs the clearing and settlementof the transactions with securities based on the datareceived from the MSE on the trading day. The datareceived from the MSE contains elementsnecessary for clearing and settlement of thematched transactions.• After the MCSD receives the matched trades fromthe MSE, the transaction is obligatory for both sidesincluded in the stated transaction.• The transactions received from the MSE are finaland cannot be unilaterally canceled by theparticipant in the clearing (the broker). Only theMCSD is allowed, by request from the MSE andwith a special purpose for correction of errors, toperform some changes or to cancel thetransactions.• Before the settlement, the participant in theclearing–the seller, is obliged to provide securitieson his/on his client the securities account, and theparticipant in the clearing–the buyer, is obliged toprovide cash on his account for cash settlement foreach transaction.Macedonian CSD Future Outlook 2009These are the main issues on which MacedonianCSD will focus during 2009:In Progress• Start of Securities Lending System in practice• Updating of Business Continuity Plan• Developing value added services for Issuers ofsecurities• Maintenance of Government securities• Developing electronic system for Custodian banksPlanned• Distributed system for account holders• Change of trades processing and pre-clearing• Change of by-laws and instructions according tochange of trade processing* Please refer to page 114 for the Macedonian country report.CONTACT INFORMATIONContact Name Ms. Sofija Vidovic E-mail vidoviks@cdhv.org.mk Website www.cdhv.org.mkPAGE 169