New roles of central securities depositories Hayk Voskanyan , Central depository of Armenia

1. New roles of central securities depositoriesHayk Voskanyan, Central depository of Armenia

2. Content • Centralized CSD system • Pension system, funded pension reforms • Other developements

3. Centralized CSD systems • Full centralization • All the services are provided to end customers by one entity-CSD • Partial centralization • Front office services related to issuers and securities owners are outsourced to specialized entities, i.e. banks and investment companies • Armenia goes the second way, partial centralization.

4. Situation in Armenia, preconditions for change • Before 2008 registry keeping was centralized to CDA • Now registry keeping is done in three entities, one of which CDA and two investment companies, • All other functions are centralized in CDA (C&S of exchange trades, ISIN)

5. Description of new model • All registers will be kept in CDA • Investment companies and banks will be account and issuer operators, CDA centralized system members • CDA will have its new software (DEPEND) • All information will be held at CDA system • All transactions will be conducted in CDA system

6. Rationale of the new system • Information system, which will comply with • international standards of IT security • IT and operational risk management standards • Equal possibilities for all market participants to serve their clients • Competition on the level of account and issuer operators • Centralization of fixed costs • Cost effectiveness

7. Rationale of the new system 2 • Centralized response to all to queries sent by state bodies • Easiness of regulatory reporting • Geographical access (now CDA operates only in Yerevan), which will save time and cost of customers • Possibilities for Investment companies and banks to provide full package of services to owners and issuers • Possibilities to use the system to enlarge the market e.g. Government Bonds • Off course centralization is not good in general, but with proper implementation and regulation we believe we will avoid all disadvantages of centralization.

8. Pension system, funded pension reform • Started from 2006 design of new mandatory funded pillar • Estonian system were used as a benchmark • 2010 December, laws passed in the parliament • Since April 2011 Armenian Mandatory Pension Information System project has started

9. Role of CDA in new pension system • Centralized account management • Receive information from SRC (tax authority) • Selection and exchange of pension funds (from account operators) • Unit issue • Unit exchange • Lump sum payments • Programmed withdrawals • Centralized custody • Safekeeping of pension assets • Link to global custodian for foreign assets

10. Other developments • Links with other CSDs • Already have account in Kazakhstan • <Depositary and corporate technologies> LLC (Russia) has account in Armenia • Plans to expand connections with other countries • We are ready to cooperate with all interested parties.

11. Thank you!