AMEDA 3 rd meeting April Morocco1 Société Interprofessionnelle pour la COmpensation et le DEpôt des VAleurs Mobilières Société Interprofessionnelle pour la COmpensation et le DEpôt des VAleurs Mobilières Functioning of the Tunisian Central securities depository and the company for clearing and settlement of securities Presented by Mrs Kaouther RAACH

AMEDA 3 rd meeting April Morocco2 Agenda 1. Brief presentation of the company 2. To be member 3. Activities and services 4. Perspectives 5. Statistics

AMEDA 3 rd meeting April Morocco3 Background Sticodevam was established on December 28, 1993 as a Public company (S.A : société anonyme in french). It’s a private company

AMEDA 3 rd meeting April Morocco4 Sticodevam Capital 1994  At the establishment’s date, Sticodevam’s capital was 160 thousand Tunisian dinars (about $ 110 thousand)

AMEDA 3 rd meeting April Morocco5 Ownership Shareholding structure in 1994

AMEDA 3 rd meeting April Morocco6 The role of Sticodevam Sticodevam was approved by the law number published on November 14 th, Sticodevam was approved by the law number published on November 14 th, 1994.

AMEDA 3 rd meeting April Morocco7 Tunisian financial market organization Tunisian Central Bank CMF = Financial market Council = Control authority Central Depository & Clearing &settlement Stock Exchange Tunisian Treasury Banks Brokers Primary dealer Issuers

AMEDA 3 rd meeting April Morocco8 Current shareholding structure

AMEDA 3 rd meeting April Morocco9 Structure of the company 19 employees  six departments Admission department (3 employees) Settlement and clearing (3 employees) IT (5 employees) Financial department (2 employees) HR and accounting department (2 employees) General Administration secretary and reception (3 employees) General Manager who manages the company (1) A board of Director s manage Sticodevam.

AMEDA 3 rd meeting April Morocco10 Activities & Services Activities & Services 1. Central depository. 2. Settlement and Clearing. 3. Management of corporate actions. 4. Management of Treasury Bonds

AMEDA 3 rd meeting April Morocco11 Central depository Members  Brokers  Banks  Issuers  Tunisian Central Bank  The Treasury

AMEDA 3 rd meeting April Morocco12 Condition to be a member Brokers  Brokers must be participant and shareholder in accordance with the law that reorganized the financial market.

AMEDA 3 rd meeting April Morocco13 Condition to be a member Issuers Issuer for equity or bonds listed on stock exchange or going to be listed : compulsory Issuer for equity or bonds that can be listed on stock exchange in few times : optional

AMEDA 3 rd meeting April Morocco14 Condition to be a member Banks There are three kinds of participation for banks To be an issuer To be a clearing bank, To be a bookkeeper for securities bonds or Treasury bonds  Fees : 5 thousand dinars per year

AMEDA 3 rd meeting April Morocco15 Condition to be a member Others  Primary dealer s  Central Bank  Treasury : there is an agreement between Sticodevam and the Treasury that imposes to the Treasury to pay 130 thousand dinars per year for all services.

AMEDA 3 rd meeting April Morocco16 CENTRAL DEPOSITORY Membership structure

AMEDA 3 rd meeting April Morocco17 Securities Admission  Listed securities  Bonds  Treasury bonds Short term maturity Treasury bonds (BTC)Short term maturity Treasury bonds (BTC) Long term maturity Treasury bonds (BTA)Long term maturity Treasury bonds (BTA)

AMEDA 3 rd meeting April Morocco18 Securities managed

AMEDA 3 rd meeting April Morocco19 ISIN Numbering  Sticodevam is the Tunisian securities numbering agency.  Sticodevam is a member of ANNA (Association of National Numbering Agencies). ANNA  Sticodevam allocates free of payment the ISIN codes which permit the sole identification of the securities deposited in its books.  Sticodevam has diffused 693 ISIN codes.

AMEDA 3 rd meeting April Morocco20 Securities form   All securities hold by Sticodevam were dematerialized since march   This dematerialization was made by law.   All securities are in a scripless/electronic form on behalf member such as custodians.   Securities are declared fungible

AMEDA 3 rd meeting April Morocco21 Account identification Each account is identified at Sticodevam by : ISIN code, Member code, Account type code (ordinary securities, securities blocked…..) Holding category : Sticodevam is presently applying book segregation : Domestic client assets Foreign client assets Mutual fund holding Own account holding ……… ………

AMEDA 3 rd meeting April Morocco22 Settlement & clearing  Stock exchange transactions  Treasury bonds market : primary and second market  Refinancing operations (banks with central bank) : money market and open market

AMEDA 3 rd meeting April Morocco23 Settlement & clearing cycle  On 1995 the settlement cycle was T+5  On may, 1999 Sticodevam improved settlement cycle : it became at T+4  On 1 st January, 2003 the settlement cycle was improved another time so it passed from T+ 4 to T+3.  Current settlement cycle is T+3

AMEDA 3 rd meeting April Morocco24 Settlement & clearing Function  Both securities and cash are netted on a bilateral basis on a T+3, with simultaneous netted cash settlement over cash accounts at Central Bank. DVP

AMEDA 3 rd meeting April Morocco25 Settlement & clearing stock exchange transactions Sticodevam receives :  daily via a dedicated line the exchange transactions file from the Tunisian stock exchange. the Tunisian stock exchangethe Tunisian stock exchange  Sticodevam receives the execution notices from brokers holding securities accounts and all the movements that affect securities accounts such as : Transfers,Transfers, Rights conversion to shares,...Rights conversion to shares,... At T+1 at 12 p. m At T+1 at 12 p. m

AMEDA 3 rd meeting April Morocco26 Settlement & clearing stock exchange transactions  Adjustment between banks and brokers : T+1 at 12 p.m. Sticodevam receives a file from banks containing all operations.

AMEDA 3 rd meeting April Morocco27 Settlement & clearing Treasury bonds auction Sticodevam treats two kinds of auctions : Sticodevam treats two kinds of auctions : Weekly for short term maturity Treasury bondsWeekly for short term maturity Treasury bonds Monthly for long term maturity Treasury bondsMonthly for long term maturity Treasury bonds

AMEDA 3 rd meeting April Morocco28 Settlement & clearing Second market for Treasury bonds  Second market for Treasury bonds is an over the counter market.  Participants to this market are banks and primary dealers, they deal in this market in accordance with an agreement established by the financial ministry.  It’s controlled by the Treasury department and the financial market council (CMF).

AMEDA 3 rd meeting April Morocco29 Settlement & clearing Second market for Treasury bonds  The settlement and clearing date for transaction deals in the second market depends on the primary dealer choice : T+1 T+1 T+2 T+2 T+3 T+3

AMEDA 3 rd meeting April Morocco30 Settlement & clearing Second market for Treasury bonds  The seller sends a matching order  The buyer sends a matching order  The two orders are matched electronically by Sticodevam’s system. If there is any difference in the amount, securities number, …the order is rejected

AMEDA 3 rd meeting April Morocco31 Settlement & clearing Refinancing operations  In order to insure efficiency and security of the operations, the Tunisia Central Bank uses the Sticodevam clearing/settlement system for refinancing operations with Tunisian banks.  these operations have security guarantee concerning securities settlement. Treasury bonds long term maturity are accepted as a refinancing operations guarantee by Central Bank of Tunisia. Central Bank of TunisiaCentral Bank of Tunisia

AMEDA 3 rd meeting April Morocco32 Settlement & clearing Refinancing operations   Presently, Sticodevam processes refinancing operations with maturities between 3 and 7 days or three months. One have to notice that restitution operation occur automatically.

AMEDA 3 rd meeting April Morocco33 Settlement & clearing Open Market  Central Bank uses Sticodevam’s settlement and clearing for the open market operations.

AMEDA 3 rd meeting April Morocco34 Settlement & Clearing  The clearing is done at the Central Bank  Each broker has a clearing bank  Each bank gives Sticodevam a permanent authorization to be able to debit its account for and for the broker cleared for the net cleared in the Central Bank

AMEDA 3 rd meeting April Morocco35 Settlement & clearing  Securities settlement and cash payment occur the same day : DVP,  Guarantee of simultaneous settlement in cash (Clearing at Central Bank of Tunisia) and delivery of the securities. Central Bank of TunisiaCentral Bank of Tunisia

AMEDA 3 rd meeting April Morocco36 Corporate Actions Dividend payment   For all securities managed, Sticodevam offers direct payment procedure that is an efficient service that allows payments to be made on due date : automatic income payments in Central Bank   This service includes: notification of payment and an estimated amount to be received three days prior to payment

AMEDA 3 rd meeting April Morocco37 Corporate Actions Dividend payment Corporate Actions Dividend payment T - 4 T+ 3 Payment of the bookkeeper T - 1 Balance of securities number to be used for dividend payment TRANSMISSION OF THE ESTIMATE AMOUNT TO THE ISSUER T T - 1 T - 4 T+ 3 T T - 4 T+ 3 T

AMEDA 3 rd meeting April Morocco38 Corporate Actions interest payment  This procedure is used for paying bonds interest, Treasury bonds interest and capital redemption.  The payment is made on due date  If there are any transactions between D-1 (D : due date for payment) and D+2 : Sticodevam regulates them.  Sticodevam uses direct payment via the Tunisian Central Bank for the clearing.

AMEDA 3 rd meeting April Morocco39 Corporate Actions Capital increase  At D : date of the capital increase; an account for rights is created based on the balance of each bookkeeper on D-1 ( D = due date of capital increase)  Conversion of rights must be done by the bookkeeper

AMEDA 3 rd meeting April Morocco40 REPORTING  Since October, Sticodevam is using the web technology to communicate with all members  Since October, 1 st 2005 Sticodevam is using the web technology to communicate with all members  A private area was created on Sticodevam web site  Each member access to his personal account using an identification code and a password

AMEDA 3 rd meeting April Morocco41 REPORTING  Daily movements report  Account balance  Files of movements download  Files of movements to be transmitted to Sticodevam  Documentation

AMEDA 3 rd meeting April Morocco42

AMEDA 3 rd meeting April Morocco43 NETWORK STRUCTURE

AMEDA 3 rd meeting April Morocco44 Perspectives  Electronic signature  All communications with members will be base on electronic system  Real time for OTC market : repurchase agreement, second market for treasury bonds

AMEDA 3 rd meeting April Morocco45 Statistics Transactions number

AMEDA 3 rd meeting April Morocco46 STATISTICS Securities number Treated

AMEDA 3 rd meeting April Morocco47 STATISTICS Total amount Settled for stock exchange transactions

AMEDA 3 rd meeting April Morocco48 STATISTICS Total amount cleared in the Central Bank

AMEDA 3 rd meeting April Morocco49 STATISTICS Number of movements

AMEDA 3 rd meeting April Morocco50 CONCLUSION Three words could define the role of Sticodevam : security, security, efficiency efficiency transactions’ guarantee transactions’ guarantee

AMEDA 3 rd meeting April Morocco51 CONCLUSION Security by insuring the transfer between financial intermediaries holding securities accounts. Securities transfer is simply a written order. Market Efficiency by reducing costs and operational risks when manipulating physical securities. Guarantee settlement in cash (Tunisian Central Bank clearing) and delivery of the securities are simultaneous and irrevocable. In one word, the guarantee of the good achievement of the transactions.

AMEDA 3 rd meeting April Morocco52 : Adresse : avenue Hedi chaker- 8ème étage 1002 Tunis belvédère Tel : Fax :