"Central Securities Depository" JSC (Central Depository) has announced its performance results for 2023, showcasing significant growth and development in various directions. These results highlight the key role of the Central Depository in Kazakhstan's financial system and its commitment to improving and innovating its services, DKnews.kz reports.
Key Financial Indicators
In 2023, the Central Depository achieved notable success in several key financial indicators:
- Nominal Holding Volume of Financial Instruments as of January 1, 2024, amounted to 126.61 trillion tenge, which is 15.45 trillion tenge (13.90%) higher than the same figure for the previous year. This growth indicates a steady increase in trust from market participants and an increase in transaction volumes.
- Nominal Holding Volume of Government Securities as of January 1, 2024, amounted to 20.85 trillion tenge, which is 27.55% higher compared to the same figure for the previous year. This reflects the growing interest in government securities and the active participation of the state in managing financial flows.
- Number of Sub-accounts opened on depositors' accounts in the Central Depository increased by 146,231 in 2023, totaling 696,435 sub-accounts. This indicates an increase in investor activity and an expansion of the client base.
- 10 Sub-accounts for Aggregated Client Asset Accounting serviced 1,748,911 brokerage accounts, which is 1,335,384 more than the previous year. This figure demonstrates the successful implementation of aggregated accounting systems that simplify client asset management and increase operational efficiency.
- Number of Securities Issues Under Depository Services increased by 160 to 2,386 issues. This shows the growing confidence of issuers in the Central Depository and the increase in new securities issues.
Major Events and Achievements
Development of Omnibus Accounts
In 2023, one of the main focuses of the Central Depository was the development of omnibus accounts. In March 2023, an STP (straight-through processing) service was introduced, allowing for the seamless processing of orders when transferring clients' assets from segregated sub-accounts to the omnibus account. Through this service, 33,070 clients of one depository were transferred to an omnibus account, significantly simplifying asset management and increasing operational efficiency.
Automation of Securities Issue Registration
In June 2023, the Central Depository, together with the Agency for Regulation and Development of the Financial Market (ARDM), automated the registration process for non-state emission securities. The new service, implemented through the Central Depository's web portal, eliminated traditional limitations associated with manual paper document completion, scanning, and the need for physical presence. In 2023, 431 applications for securities issue registration services were submitted through the "Issuer" personal account, resulting in the registration of 81 securities issues, amendments to 45 issues, cancellation of four issues, and approval of 39 placement reports.
Implementation of ESG Standards
In June 2023, following the Sustainable Development Policy adopted in 2022, the Central Depository approved an action plan to implement ESG standards. The plan includes activities aimed at managing environmental impact and adopting responsible social practices, reflecting the Central Depository's commitment to sustainability and social responsibility in business.
Access to International Markets
In November 2023, the Central Depository opened an account with the global custodian The Bank of New York Mellon (BNYM). This event provided depositories with direct access to the US and other foreign markets, expanding the range of investment instruments. Additionally, depositories gained access to a wider range of US issuer securities, previously unavailable through higher-tier organizations like Euroclear and Clearstream.
Biometric Service
In November 2023, the Central Depository gained access to state databases of individuals and legal entities to launch a biometric service for investor identification. The new service provides simplified access to identification processes within the "Personal Account" information system without using electronic digital signatures.
Corporate Actions Portal
In December 2023, the Central Depository launched a corporate actions portal for securities. Issuers can send notifications to their securities holders about corporate events and actions via the personal account. Currently, the Central Depository has automated over 70 types of corporate events and actions, significantly improving communication between issuers and investors.
Over-the-Counter Securities Trading Platform
At the end of 2023, the Central Depository launched a pilot over-the-counter securities trading platform. This new service allows holders of unlisted securities to submit buy or sell orders for these assets on the Central Depository's platform, promoting the development of over-the-counter trading and increasing the liquidity of unlisted assets.
International Activities
The Central Depository actively participates in international activities, strengthening its position in the global market and expanding cooperation with foreign partners.
WFC Chairmanship
One of the significant events of 2023 was the Central Depository's chairmanship in the World Forum of Central Securities Depositories (WFC), uniting five regional depository associations. In May 2023, the Central Depository participated in the WFC in Prague, announcing the next forum to be held in Kazakhstan in 2025.
Organizing ACG Annual Meeting
In February 2023, the Central Depository received a proposal from the ACG Secretariat to host the 26th ACG Annual General Meeting in Kazakhstan in 2024. In October 2023, the Central Depository participated in the ACG 25th Annual General Meeting in Danang (Vietnam), discussing global investment initiatives and the company's digital development.
Participation in International Conferences
The Central Depository traditionally participates in various international conferences and forums. In June 2023, it presented at the ConFEAS panel session, highlighting the role of omnibus accounts in increasing retail investor numbers. In September 2023, the Central Depository participated in the XIX ACG International Conference in Dushanbe, moderating a panel session and presenting on the role of the Central Depository as a unified registrar.
Adil Mukhamedzhanov, Chairman of the Board of the Central Securities Depository
The Central Depository continues to make significant progress in enhancing and developing its services, actively participating in international activities, and implementing advanced technologies. The achieved results reaffirm its key role in Kazakhstan's financial market infrastructure and its commitment to further developing and improving its services. In 2023, the Central Depository not only strengthened its position in the domestic market but also expanded its international connections, contributing to the integration of Kazakhstan into the global financial system and increasing confidence in domestic financial institutions.
