Central Securities Depository Of IRAN


Application of New Risk Management System


The growth in volume and complexity of financial markets have increased concern over the risk introduced by various instruments into the global marketplace. 


This is a major concern not only for regulators, but also for markets participants’ altogether. In this context, risk management has become an essential part of regulators’ activities. 


A risk management system is a valuable instrument for assessing the exposure to risk that participants in the financial sector in general are subject to. 


Central Securities Depository of Iran (CSDI) has started using a Risk Management System to measure risk across markets, quantify capital allocation to markets and dealers, establish meaningful risk limits and supervise performance.


The system is up and running since 30 January, 2019 for 15 minutes on each transaction day, following a notice sent to all brokers prior to the change. According to one of the members of the Board of Directors at Iran's Securities and Exchange Organization (SEO), this initial 15-minute duration will gradually increase.


The new Risk Management System applied to the capital market does not interfere with the routine activities of online transactions. The system only unifies transactions, manages risks for brokers and investors and prevents errors in purchase orders to foster fairness in transactions.


In general, a risk management framework includes evaluation components of risk assessment, risk confrontation, risk intervention, risk communication, and risk management. The Iranian capital market is persistently developing integrated network systems for risk management of transactions.