In other words, the depository maintains accounts that record securities transferred to it by clients for safekeeping, and also directly stores certificates of these valuable papers. Keeping accounts gives the depository the opportunity to fix (certify) the ownership of securities and take into account those property rights that are secured by them. Accounts intended for the accounting of securities are called "depo accounts".
The depositary can only be entity. Custody activities may be combined with other types of professional activities in the securities market, except for maintaining the register of securities holders. Most often, depository activities are combined with activities to identify mutual obligations transactions (settlement and clearing activities). The depositary has the right to register in the system of keeping the register of securities owners or with another depository as a nominal holder.
A person who uses the services of a depository for safekeeping of securities and registration of ownership rights to securities is referred to as depositor.
The agreement between the depository and the depositor, which regulates their relations in the process of depository activities, is called depository agreement(Depo account agreement).
The conclusion of a depositary agreement does not entail the transfer to the depository of the ownership of the depositor's securities. The depository shall not have the right to dispose of the depositor's securities, manage them or carry out any actions with securities on behalf of the depositor, except for those carried out on the instructions of the depositor in cases stipulated by the depositary agreement.
Depositories appeared to speed up settlements in organized securities markets. Currently, when registering the results of a transaction made between brokers on the stock exchange, it is not necessary to turn to expensive and leisurely registrar services. The change of ownership is reflected in the depo accounts of the exchange depository. This eliminates the need to reissue certificates that are issued to the depository and continue to be in its storage. Therefore, settlements on securities become non-cash and are reduced to making changes to depo accounts.
In many cases, issuers prefer to fulfill their obligations without the involvement of a registrar, but with the help of a depositary. For example, when paying dividends, the issuer transfers to the depository an amount of money corresponding to the number of securities in the depositary's account. The depository, in turn, transfers dividends to its clients in accordance with the number of securities of this issue held on their depo accounts. This gives rise to another function of the depository. He is an intermediary between the issuer and the investor. The depositary helps the client, who has deposited his securities, to receive the benefits due to him, transfers all the information intended for him coming from the issuer.
Often at first glance it seems that the functions of registrars and depositaries are similar, but there are still some differences between them:
Ø registrars take into account all shareholders who own securities of a particular issuer, i.e. all investors;
Ø Depositories take into account securities of different issuers owned by a particular investor.
In countries with a developed securities market, certificates of all shares are held in depositories. Such depositories can exist both nationally (Japan) and regionally. In fact, these are organizations that not only store papers, but also perform transactions with them.
To store share certificates, owners usually use the services of another category of professional market participants - depository institutions. The depository is, as it were, a nominal holder of the companies' shares. In the depository brokerage companies have their own accounts, which account for the securities of their clients - specific investors. Thus, brokers also become nominal holders of their clients' securities. Such a system greatly simplifies the operations of buying and selling securities. For example, in the United States, most securities are registered not in the name of their actual owner, but in a "street name" (street name).
Depositories are currently divided into settlement and custodial.
Settlement depositories serve participants in organized markets. They are called settlement because, in addition to depositary activities, they settle transactions or interact with clearing and trading systems in order to ensure settlements on transactions with securities of their depositors.
Custodial depositories provide services to the direct owners of securities, so they are often called client. In Russia, they are divided into specialized and non-specialized. Non-specialized combine depository activities with intermediary activities (brokerage, dealership, securities management activities). Specialized ones serve mutual investment funds or a specific issuer who, when issuing his documentary registered securities, decided on their mandatory centralized storage.
To perform the functions assigned to the depository, you need to conclude a special agreement with your clients, who are called depositors. Such an agreement is called a depositary agreement. In accordance with the agreement, the depositor may instruct the depositary only to store and record his securities, or, in addition to storing and accounting for securities, the depositor may instruct the depositary to buy other securities or sell those that are in storage, to act on his behalf on general meeting shareholders, receive income, etc.
Distinguish between open and closed methods of accounting for securities in depositories. At open accounting method certificates of all securities of one issue are accounted for “in one heap”. It is impossible to tell which of the depositors which certificate belongs to. Instructions for the execution of depository operations in this type of accounting are accepted only with an indication of the number of securities without indicating their individual characteristics.
At closed method of accounting the depository knows exactly which securities belong to the given depositor. With this method of accounting, instructions from the depositor are accepted with indication of the individual characteristics of the securities or certificates certifying them.
open way much more technologically advanced and simpler, and it should be recommended for organizing accounting for issue-grade securities, when the consumer properties of different securities of the same issue do not differ from each other. The closed method of accounting is recommended to be used in special cases when the properties of securities of the same issue may be different.
Both open and closed methods of depositary accounting should be distinguished from the storage of valuables as such. Depositary storage differs from the storage of valuables (including securities certificates) “in a safe” in that, on behalf of a client, depository operations can be performed with securities (in particular, non-cash debits and credits), while with a “safe” storage, it is possible the set of operations is limited to accepting valuables for storage and removing them from storage.
With a paperless form of securities issue, the entire issue or part of it is formalized as a “global certificate”, which is deposited with an authorized depository on the basis of an agreement between the issuer and the depositary. Such certificates are not handed over to the direct owners of the securities.
The depositaries or the issuer shall issue to the direct owner of the security an extract from their accounting books or another nominal document confirming the rights of this owner to the securities stored there.
In Germany, all securities traded on the Deutsche Bourse, with a few exceptions, are held in a central depository (CSD). Most of the releases are issued by global certificates, i.e. currently exist in non-cash form. The delivery of securities is carried out by simple entry on depo accounts.
On many stock exchanges, having an account with a depository is necessary condition to participate in settlements on transactions with securities. Depo accounts are opened for buyers and sellers of securities. Securities are credited to this account after the purchase of securities against the relevant payment amount.
On behalf of the client-seller, the depository makes a preliminary write-off of securities from his depo account and credits them to the buffer (intermediate) depo account. In order to credit the securities to his account, the buyer must pay for the transaction, the tax on transactions with securities and the registration fee. After his funds arrive at the seller's clearing account, the securities are debited from the buffer depo account and credited to the buyer's depo account.
Depositary and settlement organization notify the buyer of the transfer of securities to his depo account. In addition, it is the responsibility of the depositary to deposit necessary changes to the register of shareholders or transfer of information to the registrar of this issuer about the transfer of ownership of the seller's securities to the buyer. This operation must be made by the depository no later than 30 days before the official announcement of the date of payment of income on securities.
The emergence of such intermediaries as depositaries, especially of a centralized nature, in which the bulk of securities or large blocks of certificates representing them are constantly located, made it possible to avoid the physical movement of stock instruments immediately after each transaction with them. This procedure is beneficial to all market participants: both individual investors and stock companies.
The use of specialized computer accounting and settlement systems in modern depositories, electronic systems increases the liquidity of the stock market, facilitates the execution of orders for small clients and thereby attracts an additional huge number of small investors to the market.
In some countries, especially in developing countries, central depository institutions do not exist or are in the process of being established.
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In other words, the depository maintains accounts on which the securities transferred to it by clients for safekeeping are recorded, and also directly stores the certificates of these securities. Keeping accounts gives the depository the opportunity to fix (certify) the ownership of securities and take into account those property rights that are secured by them. Securities accounts are called "depo accounts", and the client is called depositor.
When collecting the register for one of the deposited issues of securities (if the issuer needs it), the depository, being a nominal holder, will inform the registrar of the names of the true owners. However, in many cases, issuers prefer not to collect a complete register, but perform their duties with the help of a depository. For example, when paying dividends, the issuer transfers to the depository an amount of money corresponding to the number of securities in the depositary's account. The depository, in turn, transfers dividends to its clients in accordance with the number of securities of this issue held on their depo accounts. This gives rise to another function of the depository. He is an intermediary between the issuer and the investor.
That. the depository may provide its depositors with near-depository services facilitating the realization by owners of property rights secured by securities, for example, participation in the management joint stock company, receiving income from securities, verifying the authenticity of securities certificates, issuing securities certificates and transferring them to third parties, etc.
In order for the depository to be able to fully perform its intermediary functions, its position must be “legitimized”. As a rule, for this, the depository becomes nominee or entering into an agreement with the issuer, head depository for this issue of securities.
The depositary may be only legal entity. Depository activities can be combined with other types of professional activity in the securities market, other than registering activities holders of securities. Most often, depository activities are combined with activities to identify mutual obligations under transactions (settlement and clearing activities).
Depository activities are subject to licensing. A license to carry out depository activities is issued for a period of up to three years. The main requirements for obtaining a license are financial security and professional suitability.
A depository account agreement is concluded between a depositor and a depository, which regulates their relations in the process of depository activities. Such an agreement is called a deposit agreement. The depository bears civil liability for the safety of securities certificates deposited with it.
Depositories service securities issued both in cash and in non-cash form.
Securities can be stored in a depository in two ways: in open (collective) and closed (separate) forms.
Storage in open (collective) form means that the depository not only performs the functions of storage and servicing of these securities, but also manages them, i.e. participates in meetings of shareholders and has the right to vote. This type of storage is similar to a trust. In this case, the nominal holder of securities is called the voting nominal holder.
Securities, the certificates of which have been deposited with a depository on open storage terms, are fractional ownership all clients of the depositary who deposited securities of the same issue with it. The ownership of securities by specific clients is not identified by numbers and series.
Open storage securities certificates are kept by the depository jointly by issues without sorting by clients, and can also be entrusted for storage to secondary depositories on open storage conditions.
Securities issued by global certificates may only be held in open custody.
Storage in closed (separate) form means that the depository is engaged only in the storage and maintenance of these securities. Securities are managed by their owner. The depository acts as a nominee holder without voting rights.
Certificates of such securities are kept separately from securities of other clients and securities belonging to the depository itself. These certificates must be handed over to the client upon his first request. The depository may not entrust the custody of such securities, pledge them, lend them, or perform other operations with them, except for those expressly stipulated in the custody agreement with the client.
Depositories are currently divided into settlement and custodial.
Settlement depositories serve participants in organized markets. They are called settlement because, in addition to depositary activities, they settle transactions or interact with clearing and trading systems in order to ensure settlements on transactions with securities of their depositors.
Custodial depositories provide services to the direct owners of securities, so they are often called client. In Russia they are divided into:
1) specialized - serve mutual investment funds or a specific issuer, which, when issuing its documentary registered securities, decided on their mandatory centralized storage;
2) non-specialized - combine depository activities with intermediary activities (brokerage, dealership, securities management activities).
The depository, on the basis of the order of the client-seller, makes a preliminary write-off of securities from his "depo" account and credits them to the buffer (intermediate) "depo" account. In order to reflect all the details of the state of securities, the concept of a personal depo account is introduced. Depo account- the minimum unit of depository accounting. It takes into account securities of the same issue that are in the same condition. Personal accounts are opened as necessary when performing certain operations of the depositary. The totality of the owner's personal accounts forms his depo account.
Some personal accounts can be combined by a common feature. For example, securities of several issues pledged under one agreement, or all securities offered for trading under one trading system, and so on. Therefore, for a more accurate reflection in the depositary accounting of relations arising on stock market in the process of circulation of a security, the concept appears "depo account section", which consists of one or more personal accounts, united by a common feature. A depo account section corresponds to a certain document that describes the basic rules for working with personal accounts included in this section.
By analogy with cash accounts, depo accounts are passive and active. On passive accounts securities are accounted for by holders, and on active accounts - by storage locations. The design of an active depo account completely repeats the design of a passive depo account. An active depo account is also divided into personal accounts, which can be combined into sections. Each security deposited with a depository is counted twice: as an asset and as a liability. From this comes the concept "depot balance": the depositary 's obligations to clients must be secured by assets held in custody separately for each issue of securities . This is the main requirement of depositary accounting, which allows it to be as close as possible to the standard rules of monetary balance accounting.
The work of the depositary is expressed in the depositary operations carried out by him. Depository operation- a set of actions of the depository with accounting registers, stored certificates of securities and other materials of depository accounting. The following classes of depositary operations can be distinguished: administrative, inventory, information, complex and global.
Administrative operations associated with the opening and closing of depo accounts. They can be of two types: a depo account of a depositor and a depo account at the place where the securities are kept.
inventory operations change the balance of securities on the depo account, therefore they are associated with the acceptance of securities, their transfer or movement, as well as with the removal of securities from storage or accounting.
Information operations related to the preparation of reports and certificates on the status of the depo account on behalf of the depositors.
Complex operations are operations that include elements of different classes of operations. For example, a depository may block a depositor's securities, i.e. it temporarily stops the movement of securities on the accounts. Such an operation has the features of both administrative and inventory operations.
Global Operations depository affect all securities of a particular issue or a significant part of them. Such operations are carried out at the initiative of the issuer and are associated with the payment of income on securities, the redemption of debt securities, the conversion of bonds or shares.
A SETTLEMENT AND CLEARING ORGANIZATION is a professional participant in the securities market, a specialized organization that carries out settlement service participants organized market securities and reveals their positions based on the results of transactions.
The main goals of this organization are:
1) identifying the positions of participants in transactions and their settlement;
2) cost reduction for settlement services for market participants;
3) reduction of settlement time;
4) reduction to a minimum level of all types of risks that occur in the calculations.
A settlement and clearing organization may exist in the form closed joint stock company or non-profit partnership and must be licensed Federal Commission on the securities market, which is issued for a period of up to three years. She can serve any one stock exchange or several stock exchanges or securities markets at once.
The activities of settlement and clearing organizations include:
1) carrying out settlement transactions between members of the settlement and clearing organization (and in some cases also other participants in the stock market);
2) offsetting mutual claims between settlement participants, or clearing;
3) collection, reconciliation and adjustment of information on transactions made in the markets served by this organization;
4) development of the settlement schedule, i.е. setting strict deadlines during which funds and related information and documentation must be received by the settlement and clearing organization;
5) control over the movement of securities (or other assets underlying exchange transactions) as a result of the execution of contracts;
6) guaranteeing the execution of contracts (transactions) concluded on the stock exchange;
7) accounting and documentary registration of the calculations made.
Typically, a clearing house is commercial organization which must operate at a profit. Her authorized capital funded by contributions from its members. Main sources of income:
1) payment for registration of transactions;
2) proceeds from the sale of information;
3) profit from circulation Money held by the organization;
4) proceeds from the sale of their settlement technologies, software and so on.;
5) other income.
Without settlement and clearing organizations, it is impossible to trade derivative securities - futures contracts and exchange options.
Relationships between the settlement and clearing organization and its members, stock exchanges and other organizations are built on the basis of relevant agreements.
The members of such an organization are usually big banks and major financial companies as well as stock and futures exchanges.
Settlement and clearing organizations do not have the right to conduct credit and most other active operations (to invest in securities, etc.), unlike commercial banks.
ORGANIZERS OF TRADING ON RZB (exchanges) provide services that facilitate the conclusion of transactions with securities. They can combine this activity with depository and clearing. They are obliged to disclose the following information to any interested person: the rules for admission to trading of securities market participants and the securities themselves, the conclusion and verification of transactions, the registration and execution of transactions, the schedule of services provided, etc. For each transaction concluded in accordance with the established rules, any person is provided with information on the date and time of the conclusion of the transaction, the price of one security, the number of securities, etc. They should contribute to the openness of the RZB.
The main task of the exchange is to establish market price for one or another type of securities and ensuring the completion of transactions on this or close price, concluded on the stock exchange. Several mechanisms are used to set the market price:
1) auctions;
2) a system with quotes and market makers;
3) application-based system;
4) a system with specialists.
Auction the system is best known and most often used for the initial placement or sale of not very liquid securities. It involves the collection of applications with their subsequent comparison and selection of the most attractive ones for the counterparty. There are several variants of it, differing in the conditions for submitting applications and concluding transactions.
1) the Dutch auction assumes that the seller, having set a deliberately high starting price, begins to reduce it until a buyer is found;
2) an English auction involves a direct struggle between buyers who consistently increase the price of the proposed lot. The buyer is the one whose offer will be the last;
3) a closed auction involves a preliminary collection of bids with the subsequent selection of the most attractive of them.
System with market makers(quote-driven system) is usually used for securities with limited liquidity. All trading participants are divided into two groups - market makers and market takers. Market makers assume obligations to maintain quotes, i.e. public obligations to buy and sell these securities at the prices they have announced. In exchange for such a commitment, other trading participants (market takers) have the right to enter into transactions only with market makers. It is very conditional to compare market makers with sellers who are constantly on the market, and market takers - with buyers who come there and, after comparing sellers' offers, choose the most profitable, but buy only from sellers.
Application based system(order-driven system), involves the submission of bids for the purchase and sale at the same time. If the prices of the two bids match, the trade is executed. This system is used for the most liquid securities, when there is no shortage of bids.
Finally, system with experts involves dedicated participants - specialists who serve as intermediaries between brokers who submit their applications to them. Specialists enter into transactions on their own behalf with all bidders. Their profit appears as a result of playing on small fluctuations in the exchange rate, which they are obliged to smooth out in exchange.
Technologically, any of the systems can be implemented both "on the floor" and through electronic networks connections.
1. What are the functions of the securities market?
2. Give a general assessment of the role of the securities market for a market economy.
3. What is the procedure for issuing securities?
4. What is the procedure for registering an issue of securities?
5. What is a "prospectus"?
6. What information about securities and financial and economic activities should an issuer of publicly placed securities disclose?
7. What are the features of placement of securities in open (public) and closed (private) forms?
8. What types of professional activities in the securities market are allowed to be combined in Russia?
9. What is "nominal holding"?
10. What are the similarities and differences between the functions of custodians and registrars?
11. Which model (banking, non-banking, mixed) can be attributed to Russian market valuable papers? Why?
12. What types of activities recognized as professional in the Law of the Russian Federation "On the Securities Market" relate to activities for the redistribution of monetary resources and financial intermediation and activities for organizational, technical and information services for the issue and circulation of securities?
13. What are the conditions for obtaining a license to carry out various kinds professional activity in the securities market?
This type of service is used by clients who own securities issued in documentary form. In order not to store forms at home or in the office, which is fraught with the loss of these securities, the investor transfers them to the depository for storage. Historically, modern depositories have grown out of organizations providing securities custody services.
Services for recording rights to securities
This function is a logical continuation of the previous one. If an investor sells securities, then without the services of a depository, the transaction looks like this: the investor takes his securities from the depository, transfers them to the buyer, who pays the money. However, the transaction can be performed differently, given that the buyer will again deposit the securities in the same depository. In this case, the securities may not be taken from the depository, and the owner of the securities issues a written instruction to the depository to transfer them to the buyer. This greatly simplifies the transaction and reduces the risks associated with the transfer of securities from hand to hand.
The function of accounting for rights to securities began to be used to the fullest extent during the transition to the issue of non-documentary securities. In this case, a special account called "depot" is opened for the investor in the depository. On the “depo” account, the depositor's securities are recorded and records are made of all transactions made by the depositor with securities. The fact that the securities (the rights to securities) have been transferred to the custody of the depositary shall be confirmed by an extract from the depo account. The statement itself is not a security and cannot serve as a subject of purchase and sale.
The relationship between the depository and the depositor is regulated by an agreement, which should reflect:
1. The Subject of the Agreement;
2. term of the contract;
3. the procedure for the depositor to transfer securities for safekeeping, and if the securities are issued in non-documentary form, the procedure for the depositor to transfer information about the rights to securities;
4. the procedure for accounting for rights to securities and the procedure for re-registration of the transfer of rights to securities from one person to another;
5. the amount and procedure for paying for the services of the depositary;
6. the procedure for reporting by the depository to the depositor.
The transfer of securities for safekeeping to a depository does not mean the transfer of ownership of these securities to the depository. The main task of the depository is to ensure the safety of securities or rights to securities and to act solely in the interests of the depositor. The depositary shall not have the right to dispose of the securities, manage them or perform any transactions with them. Due to the fact that the securities kept by the depository are not its property, they cannot be levied on its obligations.
In the process of carrying out its activities, the depository is entrusted with the following functions:
· storage of certificates of securities, if the securities are issued in documentary form;
· registration of the encumbrance of the depositor's securities with any obligations (collateral, resource provision, etc.);
· maintenance of depo accounts reflecting in them the number and type of securities of all operations carried out by the depositor;
· transfer to the depositor of information received by the depository from the issuer and the registrar;
verification of securities certificates for authenticity;
collection and transportation of securities.
The depository may perform the functions of a nominal holder, that is, hold securities on its own behalf, without being the owner of the securities. As a nominal holder, a depository may exercise the rights attached to a security only if it receives the appropriate authority from their real owner.
Comparison of depositary and registrar
The activities of the registrar and depositary have many common features. Both open accounts for securities holders, take into account the number and type of securities on investor accounts, reflect all client transactions with securities, etc. However, each of them performs a quite specific amount of work on the market and they complement each other. Table 1 provides a description of depositories and registrars according to their main distinguishing features.
Table 1. Differences between a registrar and a depository
| sign | Registrar | Depositary |
| Contractual relationship | Agreement with the issuer for maintaining the register | Agreement with the client depositary service |
| Service object | Issuer | Securities holders |
| Accounting function | Included in the register of securities holders of one issuer | Takes into account investor-owned securities of various issuers |
| Account type | personal account | Depo account |
| Payment for services | Mainly paid by the issuer | Paid by the owner of the securities |
| Competitive environment | Competes with other registrars for the issuer | Competes with other depositories for securities holders |
The registrar is mainly focused on the issuer with which it has existing contractual relationship register and from which he receives the principal amount of remuneration. The depositary is not tied to a specific issuer, it is focused on investors who can store (take into account the rights) securities of various issuers with it. It is more convenient for an investor who owns shares of various issuers to be served in a depository and register all their transactions there than to communicate with various registrars.
If the issuer pays for the registrar's work, the investor pays for the services of the depositary. For clients who have opened a depo account with CJSC "ALOR INVEST", the following tariffs for payment for services of depositories are established:
- Opening a depo account is free of charge,
- A commission of 100 rubles is charged for maintaining an account. per month.
- If no transactions were made within a month, no commission is taken.
Example
As stated earlier, registrars and custodians are very closely related. On fig. 1 shows the interaction of registrars and depositories.
Rice. 1. Interaction between the registrar and depositories
The figure shows that the issuer's shares are owned by 6 persons. Two of them (Sidorov and Ivanov) directly registered in the register and personal accounts are opened on them, each of which indicates the number of shares they own. Other investors preferred to record securities in depositories: Petrov and Tur LLC in depository No. 1, and Sidorov and Sot JSC in depository No. 2. Depo accounts are opened for these investors in depositories. The following will be registered in the register as nominee holders: Depository No. 1 with the total number of shares held by it (1400 shares) and Depository No. 2 with the number of 1200 shares.
Investors registered in one depository, selling shares to each other, register transactions in this depository, which makes changes to their depo accounts. Due to the fact that the total number of shares in the depository has not changed, nothing changes in the register on the nominee account.
Changes in the nominee account occur only when the total number of shares held by the depositary changes (see Figure 2).
Rice. 2. Change of entries in the accounts of nominal holders
If, in our example, Petrov sold 300 shares of Sot JSC, which is registered with another depository, then in this case, these changes will be reflected in the register on the accounts of nominee holders. Depository No. 1 will have 1,100 shares in its account, while Depository No. 2 will have 1,500 shares in its account. This operation is shown in Fig. 4.5.
During this operation, 300 shares will be transferred from Depository No. 1 to Depository No. 2. Due to the fact that the total number of shares in each depository has changed, corresponding changes are made in the register on the accounts of nominal holders.
Concept. Custody activity is the provision of services for the storage of securities certificates and / or accounting and transfer of rights to securities.
Storage of certificates of securities, or securities in documentary form, as an independent activity, is not a professional activity in the securities market and can be carried out by other participants.
For example, often documentary securities are kept in personal (individual) bank vaults, i.e. this kind of service is intermarket, since there is always a need to store (preserve) a wide variety of material assets. You can store valuables both in the warehouse and in commercial bank, and in a law office, and in a museum, etc.
IN modern conditions, when the majority of issuance securities are issued in non-documentary form, depository activity is mainly the provision of services for accounting and transfer of rights (property) to securities.
The depositary is more a participant in the secondary securities market, as opposed to a registrar, which is primarily a participant in the primary market. The fact is that the registrar is responsible for fixing the relationship between the issuer and investors, maintaining and updating it, which is part of the relationship of the primary securities market. The depository, on the contrary, fixes the relationship between investors when changing ownership of securities, which takes place in the secondary market. Its task is to provide a fast and cheap way to transfer the rights to a security from one market participant to another.
The user of the services of the depositary is called a depositor, and the account opened for him in the depositary is called a depo account.
Changing the method of certification of rights to securities in the depository. The transfer of securities accounting to the depository is carried out:
1) when a security certificate is deposited with a depository. In this case, the documentary method of certifying the rights to a security is replaced by a non-documentary method, i.e., transactions with these securities are subsequently recorded in the form of entries on depo accounts without issuing new certificates (possible different variants this situation, depending on the conditions for issuing a documentary security - whether it involves issuing certificates to private owners of securities or whether there is only a certificate for issuing this security as a whole);
2) when the depository becomes a nominal holder of securities in the registry system of their owners. In this case, there is a simple transfer of accounting for the relevant securities from the registrar (ie, from the personal accounts of their owners) to the depository (ie, to the depo accounts of the same owners).
Similarly, a depository may be a depositor of another depository or have other depositories as its depositors.
deposit agreement. The depositary provides its services on the basis of a depository agreement concluded with its depositors. Under this agreement:
The depository may not dispose of the securities of the depositors, except for the execution of their instructions regarding these securities;
Securities of depositors may not be levied on the obligations of the depository;
The depository shall be responsible for keeping the certificates of securities transferred to it.
The depository agreement, or agreement on a depo account, shall specify:
Subject of the agreement (storage and/or accounting of rights to securities);
Standard conditions for the implementation of depository activities;
Contract time; the procedure for transferring information related to the disposal of securities to the depository by the depositor;
Procedure for paying for depository services; the procedure for transferring information and income from the issuer of the security to the depositor;
The procedure for exercising the rights of a depositor to participate in the management of a joint-stock company (in the case of shares) or to delegate them.
Types of depositories. Depending on the purpose of depository services, depositories are divided into:
Estimated; client ("custodial"). Settlement is a depository that serves professional
national participants in the organized stock market. It carries out its activities in an inseparable unity with the systems of trading (transactions), clearing and settlement of tradable securities.
The activities of a settlement depository may be combined only with the following types professional activity in the securities market: with clearing activities and activities for the organization of trade.
Client - a depository that provides all kinds of services to the direct owners of securities. In world practice, the activities of client (custodial) depositories, in fact, merge with the activities of registrars, but in Russia these types of services are not yet combined.
The activity of a client depository can only be combined with the following types of professional activity on
securities market: with brokerage, dealer and securities management activities.
Client depositories can be specialized registered certain types valuable papers. For example, accounting for investment units issued by mutual funds investment funds, carried out by specialized depositories.
Main functions of the client depository. The functions of a client depository can be very diverse, and most importantly, they are constantly evolving along with the changing and growing diversity of the needs of securities market participants. Modern Features depository may include:
Participation in the settlement of the transaction in terms of the delivery or acceptance of clients' securities with the crediting of these securities to client depo accounts;
Accounting and storage of clients' securities in two forms:
1) open storage, i.e. accounting for securities without their breakdown by specific clients in terms of the characteristics of securities (serial numbers and other individual attributes of securities);
2) closed custody, in which the accounting of securities is carried out directly on the registered depo accounts of clients;
Payment of income on clients' securities (dividends, interest);
Support of corporate actions of the issuer in the following cases: - bonus issue and issue of rights; - splitting (split) and consolidation of shares; - conversion of securities; - change of the name of the issuer; - liquidation of the issuer; - exercising the right to vote on shares; - acquisitions and mergers; - redemption of bonds or redemption of shares by the issuer
volume; - reinvestment of dividends (payment of dividends in
form of shares), etc.; management of clients' tax payments related to securities: - various professional assistance to clients in
laté taxes; - monitoring the correctness and timeliness of their payments
you are customers, etc.;
Provision of all kinds of information services to clients relating to securities held on depo accounts, for example, providing information: - about issuers and their actions; - about the securities markets, including the world market; - on changes in the procedures for accounting and reporting on transactions
with securities, etc. Main Differences Between Custodian Activities and Agents
responsibility for maintaining the registry system.
These differences are summarized in table. 5.4.
Table 5.4 Differences between custodian and registrar
Indicators
Contract type
Client type
The essence of professional activity
Account type
Service payer
Storage of securities certificates
Registrar
Agreement for maintaining the register of securities
Accounting for holders of securities of a given issuer
personal account
Basically, the issuer
Absent
Depositary
Deposit agreement
Investor (participant in the securities market as their owner)
Accounting for securities owned by this investor
Depo account
Mainly - holders of securities
Provides storage services for securities certificates
Basics of interaction between depositories and registrars. The interaction of the depository with the registrar covers three main points:
1) the depository, in accordance with client agreements for depository services, becomes registered with registrars as a nominal holder of securities of certain issuers that were previously registered in the name of the depository's clients;
2) the transfer of ownership of the securities of its clients without their re-registration on personal accounts with the registrar (since they are no longer there); re-registration is now carried out by transferring securities
on depo accounts with the depository itself. In the case of a massive nature of transactions with securities, this form of re-registration of ownership rights to them is the fastest and cheapest;
3) resumption of interaction with the registrar. It occurs in the event of a change in the personal account of the depositary with the registrar, which will take place only in a situation where the total number of securities of this issuer deposited in the depository changes.
Advantages of depository accounting over securities accounting with a registrar. The use of a depository as a nominal holder of securities of an issuer makes it possible to bring the time and place of the change of ownership of a security as close as possible to the place of transactions with it. As a result, the following undeniable advantages of depositary accounting arise:
No need to physically move securities;
Possibility of implementation of the principle "delivery against payment";
Elimination of "technical" boundaries for the movement of capital in the stock market.
Depository systems appeared in order to simplify the process of re-registration of securities. Previously, securities were issued only in documentary form, and, accordingly, after each transaction it was required to issue a new certificate, which was completely unreasonable in the case of speculative transactions on stock exchange. The institution of depositories made it possible to avoid the physical movement of securities between market participants and therefore did not require the systematic issuance of new certificates.
Depository accounting of securities has another advantage: it allows you to synchronize the process of transferring securities (re-registering them to new owners) with the transfer of funds between market participants. This process is called delivery versus payment. The movement of money from the buyer to the seller of a security occurs simultaneously with the transfer of ownership of the security from the seller to the buyer. Otherwise, when these processes are not synchronized, there is always a risk that either the money will be received, but the securities will not, or vice versa.
Finally, the depository form of transfer of ownership of securities turns out to be the only possible one with the development
Even if you do not aspire to become a stock shark, it will be useful to understand the issue of acquiring and holding securities.
From the article you will learn:
Are securities part of the document flow?
Securities can be attributed to business documents of monetary or property content. In fact, they are a special form of the existence of capital. They are transferred instead of him, circulate on the market as a commodity and make a profit, because. fix the owner's rights to capital.
Owner a person who possesses them by the right of ownership or other external right is considered;
Issuers are called persons who are obliged to the owners to exercise the rights enshrined in the documents.
All types of such assets have established form and contain a number required details. Their circulation is regulated by federal laws:
- "On the Features of the Issue and Circulation of State and Municipal Securities";
The processes of circulation, accounting and storage of securities cannot be attributed to the traditional workflow. Rather, they can be classified as financial transactions: disposing of them, the company manages its own capital.
Asset management requires a certain system in which to store data on their transitions from one owner to another. A brokerage account is required to trade on the stock market. It reflects information about the storage of assets in the intervals between trading, outside exchange sessions. In this case, the rights of the owners are certified by records on personal accounts in the registry system.
The registrar may be a legal entity that, under an agreement with the issuer, maintains the register, collects and processes data, stores and provides information that makes up the register. Such organizations are called registrars. The law obliges to transfer the maintenance of the register to a professional market participant if the number of owners exceeds 500 (or 50 for shares).
If a market participant needs professional representation of his own interests, he can use the services of a depository - a specialized banking unit that acts as a repository of assets. The depository not only accepts, issues, records and stores securities, but also provides services related to the registration of the transfer of ownership of them.
The difference between a registrar and a depository is that the former operates on the basis of an agreement with the issuer, i.e. the assets of two issuers may be accounted for by two different registrars. The depository, in turn, concludes an agreement with each client individually, and all the client's assets are subject to accounting on only one account.
The object of the agreement may be securities of any form of issue: both documentary and non-documentary.
The following essential conditions shall be stipulated in the depository agreement without fail:
- Subject of the contract (unambiguously defined as the provision of services and rights to them);
- The procedure for transferring information on the disposal of assets from the depositor to the depository;
- Duties of the depositary;
- Deadlines for the execution of the depositor's instructions;
- The procedure for the provision of services;
- Contract time;
- Grounds and procedure for its termination or change;
- Form of reporting and its frequency;
- The amount and procedure for paying the depository;
Period of storage of securities in the depository
When transferring assets for storage to a depository, the depositor does not always clearly represent the period of time that will be enough for him to achieve his own goals. It should be noted that profit from a deposit in a bank is possible if the value of stored assets increases according to the market dynamics. Otherwise, the owner may suffer losses.
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The storage of securities is most often carried out for business purposes, and their own properties almost always make it final. However, the depository agreement most often does not establish a maximum storage period. In essence, the client transfers assets for indefinite storage and has the right to receive them at any time.
The agreement establishes the frequency of payments, which, in fact, are a fee for servicing the depositor. Payment of the fee is not associated with the end of storage.