Central Securities Depository Of IRAN

background

Central Securities Depository of Iran is a public joint stock company, offering pre-trade and post-trade services to the Iranian capital market participants. CSDI was established as the sole registrar, safe-keeper, depository and clearing house for a broad range of financial instruments traded on the four Iranian exchanges i.e. Tehran Stock Exchange (TSE), Iran Mercantile Exchange (IME), Iran Energy Exchange (IRENEX) and Iran FaraBourse (IFB).


CSDI was founded in 2005 but its history goes back to 1967 when the Tehran Stock Exchange Brokers Association was established as the first entity in Iran capital market, being in charge of all the responsibilities, both executive and supervisory, regarding this market. However, in December 2005, the Islamic Republic of Iran Securities Market Act (SMA) was ratified by the Iranian Parliament and the structure of the Iranian capital market became demutualized. Based on the stipulations of the SMA, the Tehran Stock Exchange Brokers Association was dissolved and its regulatory and supervisory tasks were delegated to the Securities and Exchange Organization (SEO) and Central Securities Depository of Iran turned into an independent entity. CSDI as a self-Regulatory Organization (SRO) is subject to the supervision of the SEO and acts based on the rules and regulations enacted by the Iranian Parliament, the Securities and Exchange High Council, as the macro-policy maker in the capital market, and the Securities and Exchange Organization of Iran.


As the primary infrastructure organization serving the capital market in Iran, Central Securities Depository of Iran helps automate, centralize, standardize and streamline processes critical to the security and reliability of the market. We focus on key steps involved in the safe and efficient transfer of securities ownership and settlement of billions IR Rials trade obligations.


At CSDI, advance in technology is at the forefront. CSDI, which settles huge volumes of securities traded every day in the country's capital market, serves as a gateway and service-provider for both local and international investors in a secure, fast and cost-effective way. We guarantee an integrated securities settlement that has sped up the process, made it less risky and helped lower the costs of investing. CSDI ensures that cash and securities are promptly and effectively delivered between trading parties in the country’s entire financial system. CSDI also runs the registration and recording systems for securities that enable electronic filing of documents, automated registration and recordation of transfers of ownership. To name a few among other services and systems provided by CSDI, the indigenously designed and produced e-KYC system i.e. Comprehensive Information Gathering System (CIGS), the Integrated Electronic General Meeting Platform, and Integrated Capital Market Stakeholders Portal can be mentioned.


CSDI is, first and foremost, to protect and mitigate risk for customers and investors. It plays a significant role in managing systemic risks facing the investors in the Iranian capital market. In terms of settlement risks, CSDI has a collateral management system in place that, among other responsibilities, provides sufficient liquidity for executing previously failed obligations.


In 2020, CSDI took over the responsibility for Iran’s mega project of Justice Share scheme, which turned millions of Iranian people into shareholders of state-owned companies in the process of privatization plan in Iran. It was a major development in CSDI’s operations making almost all performance numbers multiplied and causing diverse range of new services provided by the company.


CSDI’s major stakeholders are the four exchanges of Iran, brokerage firms, local and foreign investors, issuers, mutual funds, investment banks, asset management companies, financial data processing companies and the judiciary. The shares of CSDI mostly belong to Iran's capital market entities, commercial banks, investment institutions, financial groups, brokerage firms, and pension funds.


CSDI is also a well-known company in the global CSD industry having served as a board member of Asia-Pacific CSD Group (ACG), Federation of Euro-Asian Stock Exchanges (FEAS), and a member (former board member) of World Forum of CSDs (WFC), Organization of Islamic Cooperation Exchanges Forum (OICEF). It has also benefited from the Memoranda of Understanding signed with its fifteen major international peers from numerous countries such as Japan, South Korea, Russia, Turkey, Switzerland, Greece, Taiwan, India, Oman, Pakistan, China, and Indonesia.


CSDI is currently the parent company of one subsidiary and two associate companies, i.e. SAMAT Samaneh (99.97%), Capital Market Central Asset Management Company (49%), and Iran Financial Center (20%) that work aligned with CSDI’s core missions. Business banks, brokerage firms, and government service offices are also CSDI’s strategic partners in registry, KYC and settlement services.


CSDI is headquartered in the Iranian capital city of Tehran, on Keshavarz Boulevard. It also has an office on Tehran's Saadi Street and a representative office on the Persian Gulf Island of Kish.


Profile

The structure of the capital market in Iran and the status of CSDI, based on the present definitions in the Securities Market Act of the Islamic Republic of Iran, the Law for Development of New Financial Instruments and Institutions and the common norms in the capital market in Iran, are shown in the following chart:

History

Founded in 2005 as a public joint stock company, Central Securities Depository of Iran (CSDI) is the sole registry entity and custodian in the Iranian capital market using the hybrid registry system with a fully dematerialized book entry system. Enjoying a history of 45 years, the Iranian capital market was demutualized in 2005 and as a result, CSDI was legally segregated from the rest of the capital market and commenced to work as an independent and separate entity. It is the central registrar and clearing house for all the exchanges in Iran including Tehran Stock Exchange

Objective of the company

Central Securities Depository of IRAN (Public Joint Stock) is established and run according to its Articles of Association and based on Clause 7, Article 1 and Clause 5, Article 4 of the Law. The Company is an Iranian National and the duration of its activity is for an unlimited period of time as of establishment date. The Securities and Exchange Organization has preferred shares of CSDI giving it the privilege of appointing three members out of total five members of the board of directors in ordinary general meetings for electing board of directors. CSDI’s Objectives Based on its Articles of Association are: