Central Securities Depository Of IRAN

Central Securities Depository of Iran (CSDI) successfully led the second online meeting of “CSD, Pre-Trade and Post-Trade Working Group” on 2 July 2024. This pivotal gathering was led by CSDI's International Relations Director and Corporate Secretary, Siavash Azimi, and included representatives from various Central Securities Depositories (CSDs), capital market infrastructure providers, and members of the Federation of the Eurasian Stock Exchanges (FEAS).

Meeting Objectives

The primary aim of the meeting was to enhance cooperation and foster the development of member capital markets, while also exploring the feasibility of linkages between FEAS CSD members. These linkages are essential for ensuring efficient and seamless cross-border transactions in the financial markets.

Key Discussions and Findings

Participants engaged in in-depth discussions on several aspects of CSD linkages, focusing on:

• Definitions and Models: Different linkage models were introduced, including direct, indirect, relay, and hybrid models.
• Importance of Linkages: The group unanimously agreed on the significance of CSD linkages in enhancing efficiency in cross-border transactions. They identified the following benefits:
• Risk Reduction: Lowering operational and financial risks associated with transactions.
• Cost Savings: Decreasing costs for market participants.
• Improved Accessibility: Facilitating greater market access for investors.
• Regulatory Compliance: Ensuring adherence to different jurisdictions’ regulations.
• Technological Advancements: Supporting innovations in financial technology.
• Market Liquidity: Enhancing the liquidity of capital markets

Challenges and Risks

The meeting also highlighted several challenges and risks tied to CSD linkages, including:

• Regulatory Differences: Variations in regulations across jurisdictions.
• Jurisdictional Conflicts: Legal complexities arising from cross-border operations.
• Operational Risks: Potential risks related to the execution of transactions.
• Technological Challenges: Issues related to compatibility and integration of systems.
• Market-Related Factors: Economic conditions affecting market performance.
• Legal Uncertainties: Ambiguities in the legal frameworks governing transactions.
• Financial Implications: Costs associated with implementing linkage solutions.
• Strategic Considerations: Broader strategic issues that may impact collaboration.

The second Working Group meeting provided a valuable platform for representatives from CSDs to exchange ideas, share experiences, and explore potential areas for collaboration. The outcomes of this meeting are expected to contribute to the development of more efficient and interconnected securities settlement infrastructures among FEAS member countries, thereby enhancing the overall stability and growth of the region's capital markets.

Release Date: 7/2/2024

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