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FEDERATION OF EURO-ASIAN STOCK EXCHANGES SEMI ANNUAL REPORT OCTOBER 2008MACEDONIAN CENTRAL SECURITIES DEPOSITORY (MCSD)AFFILIATE MEMBERFor the Macedonian Central SecuritiesDepository, 2007 was an extremelysuccessful year with extraordinary turnover,compared to the previous years.Stevan SapceskiExecutive DirectorFor the Macedonian Central SecuritiesDepository (MCSD), 2007 was an extremelysuccessful year with extraordinary turnover,compared to the previous years. In 2008 theMCSD will focus on:• Development of new business servicesSince new financial instruments will beintroduced on Macedonian Capital Market,investors, especially foreign ones, we shall startseeking various information about their holdings.The MCSD will produce reports to help investorsto maintain their portfolios.• Development of procedures, rules, policiesand technological systems for Securitiesborrowing and lendingA new possibility shall be offered to the investorson the Macedonian Capital Market: the possibilityto sell securities that they have borrowed.According to this, an investor borrows securitiesby signing a contract. CSD rules and regulationson one side and Securities law on the other, shallbe adopted to make possibility to use this featureon Macedonian Capital Market.• Development of new procedures, rules,policies and technological systems for variouscorporate actionsThe MCSD system is able to perform a set ofstandard corporate actions, however new andexisting corporate actions will be widely offeredto the Issuers to make improvements incommunication between Issuers andshareholders.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.* Please refer to page 98 for the Macedonian country report.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 and witha 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.CONTACT INFORMATIONContact Name Ms. Sofija Vidovic E-mail vidoviks@cdhv.org.mk Website www.cdhv.org.mkPAGE 94