AFRICA MIDDLE EAST DEPOSITORIES ASSOCIATION MEETING HELD IN CAIRO, EGYPT

1. AFRICA MIDDLE EAST DEPOSITORIES ASSOCIATION MEETING HELD IN CAIRO, EGYPT TUESDAY OCTOBER 25 - FRIDAY OCTOBER 28, 2011 PRESENTATION BY STEPHEN TETTEH CHIEF EXECUTIVE OFFICER CENTRAL SECURITIES DEPOSITORY GHANA LIMITED

2. Central Securities Depository (Gh.) Ltd • Introduction • Governance • Structure of accounts • IT Infrastructure • Functions • Current Reforms • Future Developments

3. Introduction • A vision embodied in the Financial Sector Strategic Plan • Recommended the establishment of the Depository • A bond development committee established to spearhead the development • Bank of Ghana provided funding • CSD went live November 29, 2004

4. Introduction • Vision: the CSD seeks to be among the leading global institutions providing efficient depository services to the financial markets to promote investment and economic growth in Ghana and the sub-region • Mission: to provide secured and dependable clearing, settlement and depository services to government securities and money markets in an efficient and cost effective manner

5. Ownership and Governance • Started as a Department of Bank of Ghana • Incorporated in June 2010 as a wholly-owned subsidiary in line with the CSD Act 2007, Act 733 • Well capitalized over and above the requirement of SEC • Seven member Board of Directors appointed headed by the Deputy Governor of Bank of Ghana

6. Objectives of the Depository • To reduce risks and improve the efficiency of securities settlement • To provide a central depository for securities in Ghana where records of beneficial ownership of debt and equity instruments are kept in electronic form • To undertake clearing and settlement of book-entry of debt and equity instruments • To handle all forms of corporate actions for debt and equi9ty instruments including maturities and interest payments

7. Overview of the CSD IT Infrastructure The CSD System is a Web-based application It runs on both a Wide Area Network and via the Internet Secured connection https VeriSign and now Oracle Certificate for point-to-point data encryption. Depository Participants log onto the system from their offices via a web browser to work. Bulk files are exchanged between the CSD and Depository Participants via Secured File Transfer Protocol (SSH). Keeping Connected In A Secured Way 7

8. Software Implemented Server Operating System (OS) – Linux RedHat Enterprise Edition Internal Server OS – Windows Server 2003 PC OS – Windows XP Report Generating Tool – Crystal Report Jinitiator Ipswitch WS-FTP Pro Software Linux – More Security, Better Protection 8

9. Database/Application Server Software Oracle Database 9i - Enterprise Edition Oracle Application Server 9i – Enterprise Edition Later Migrated To Oracle Database 10g and Oracle Application Server 10g Oracle –Leaders in Database Technologies 9

10. Network Infrastructure – CSD PWAN & Internet Backup Redundancies To Ensure Biz Continuity 10

11. Application Software Web Application Browser Application Server Database Server Communication Two Modules Treasury Auction CSD System User Access Login Prefix segregates information (e.g. EBGPD) Account Expiry Time Out No Concurrent logons Web Based Applications Leeds to Efficient, Effective Management 11

12. Account Structure of the Depository CSD custodian Beneficial Owner Beneficial Owner Custodian Beneficial Owner Unit Trusts Foreign Nominee

13. Structure of Accounts • All domestic accounts for both individual and corporate investors are held at the beneficial level • Foreign investors can hold accounts both as beneficiaries or through nominees • Acts as transfer agent and registrar • Ownership is evidenced by statement of Accounts from the Depository • Processes interests and maturities payments • Accounts are registered through participants • Currently more than 370,000 account holders

14. Agents of the Depository • Known as Depository Participants • Made up of 28 banks • 8 brokerage firms licensed by the SEC • SSNIT (The national pension fund) • Bank of Ghana • 3 custodian Banks • Criteria for admission • Licensed by BoG or SEC and in good standing • Financial position • Technical capability • Sign a Participating agreement

15. Primary Auction • CSD manages the electronic primary Auction system • Closely coupled with the Depository • Receives electronic bids of individual investors through primary dealers. • 15 banks licensed as Primary Dealers • Securities allotted at the primary auction flow smoothly into beneficiary’s accounts after settlement

16. Services provided Trade reporting and matching Clearing positions generated and communicated at the participant level Repurchase agreements among Banks using securities holdings Collateral against lending facilities Issuing of statements on positions Information dissemination to market

17. SETTLEMENT Settlement at both Primary and Secondary transactions are done through Central Bank funds Settlement model DVP II Settlement Cycle T+0 for secondary trade (to be reviewed to rolling T+1 or T+2) T+1 for the primary auction Interest and Maturities Processed and paid through the bank accounts of investors Advice sent through the banks

18. Recent reforms Review of Primary Dealing System licensing dedicated institutions as PDs Underwrite Government securities issues Make market by two-way quotes on the secondary market Buy bulk at the primary auction for redistribution Interface between CSD and RTGS To provide STP and DVP

19. Planned Developments Set up Guarantee Fund Mark-to market price determination Install an Integrated Trading system for money market, securities and forex transactions Take on other value-added activities Withholding tax collection Collateral management Registrar services for unlisted securities, mutual funds and other collective schemes