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2014
Annual Report
Summary
TUNISIE CLEARING
2
Table of Content
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Tunisie Clearing fulfills the following
missions :
The initial recording of securities in a
book-entry system (notary function) and
the central custody of securities. This
mission guarantees the issue integrality
and continuously ensures that issued
securities are equal to securities recorded
on book keepers accounts;
The management of the Securities
Settlement System according to the
Delivery vs. Payment principle in Central
Bank money.
Tunisie Clearing provides other services such
as:
Securities codification;
Registers keeping upon issuers request;
Transfer of information on registers
update ;
The possibility to segregate investors
assets from participants assets.
TUNISIE CLEARING
3
Introduction
Tunisie Clearing has always striven to create added value for its participants
by providing them with services that better meet their requirements.
Throughout its 20 years of business, the
Tunisian Central Securities Depository has
acquired an important place at the heart of
Tunisian capital markets; Tunisie Clearing has
become a key partner of all market
stakeholders and an important component of
its security architecture.
The celebration of the 20th anniversary of the
Tunisian Central Depository has witnessed: (i)
The change of the CSD name from
“STICODEVAM” to “Tunisie Clearing” which
aimed to enhance the CSD international
identification by reflecting both its business
nature and territoriality; (ii) The adoption of a
new graphic identity that refers to the CSD
central relationship with market stakeholders.
These changes were followed by the launch of
a short and medium terms IT strategy as well
as new projects based of the following pillars:
1. Implement the best
practices and standards in
the field (Classification of
Financial Instruments
« CFI »/ Financial
Instruments Short Name
« FISN »/ Legal Entity
Identifier « LEI »).
2. Meet the market needs with
respect to international
developments.
3. Enhance transparency and
information communication
and exchange.
4. Develop a trade repository
activity.
1. Reduce operational
risk through the
renovation of the
technical infrastructure
and the reinforcement
of the information
system security.
2. Reform the CSD system
to allow its integration
and development.
3. Establish a formal
Business Continuity
Plan in accordance
with the best practices
and recommendations.
1. Strengthen the legal
framework of the CSD
business and relationship
with stakeholders.
2. Enhance the CSD
governance with reference
to the best
recommendations in the
field.
3. Implement a risk
management framework.
4. Assess the CSD business
against the Principles for
Financial Market
Infrastructures.
Business Pillar IT Pillar Organizational Pillar
A trade repository is an entity that collects and centrally maintains records related to OTC (Over the
counter) trades. Trade repositories are a new type of Financial Market Infrastructure that has
recently grown in importance due to its important role in strengthening transparency and
standardizing communication related to OTC trades.
TUNISIE CLEARING
4
Governance, transparency and risk management
Tunisie Clearing has put in place a set of measures to build a sound risk
management and governance framework.
Acknowledgment of risks:
► Rating report: Tunisie Clearing has fully
reviewed its risk rating report which is
established by the agency « Thomas Murray ».
The report review was undertaken by a
working group with the participation of
concerned departments and the general
management. The report is being reviewed by
the agency. The current rating is « A-» which
refers to a low level of risk. The rating
components are the following:
Transparency :
► Redesign of the website: The redesign of the
website was mainly related to the review of
disclosed data including statistics and
bulletins: 3 monthly bulletins organized by
topic were implemented in addition to daily,
weekly and annual bulletins.
The website is available in 3 languages: Arabic,
French and English.
► Questionnaire of the Association of Global
Custodians: In accordance to the best
international practices in terms of
transparency, Tunisie Clearing has made
publicly available its responses to the AGC
questionnaire. The questionnaire responses
were reviewed and updated by a working
group before being published on Tunisie
Clearing website.
Gouvernance :
► Establishment of a code of conduct
applicable to employees: Tunisie Clearing has
implemented a code of conduct governing
professional duties and ethical rules applicable
to its staff. This code aims to ensure an
independent, efficient and accurate execution
of business and to identify and manage
conflicts of interests. The code also endeavors
to prevent any conduct in violation with the
system transparency, the protection of
participants and the orderly execution of
services.
Internal Control & Compliance
8 missions were run by the internal control
and compliance structure. The missions
were related to business operations and IT.
Staff development and training
Tunisie Clearing organizes trainings which
are either objective-driven or general.
Trainings covered topics such as repo and
Central Bank monetary policy.
TUNISIE CLEARING
5
Year highlights
► Implementation of a new billing software.
► Update of procedures manuals and
operational guidelines.
► Study of ISO 18774 standard (« Financial
Instrument Short Name/FISN »).
► Participation to the 19th meeting of Africa
and Middle East Depositories Association
(AMEDA) held in Oman.
► Launch, in collaboration with the Central
Bank of Tunisia, of a project on the
implementation of Delivery Vs Payment
principle to banks refunding operations.
► Participation to the 2nd Salon of Stock
Exchange and Financial services
« INVESTIA ». A presentation was delivered
under the theme « Central Securities
Depository and capital markets ».
► Definition of a process related to national
bonds subscription and settlement.
Standardization of securities accounting
Since April 2014, a committee of Tunisie
Clearing has started working on the
establishment of securities accounting
standards which define accounting
principles, nomenclature and classification
and aim to:
→ Implement a securities accounting
manual applicable to all bookkeepers in
the market.
→ Ensure the traceability of operations
between participants.
→ Automate reconciliations between
Tunisie Clearing and participants.
→ Protect investors rights and assets.
The work was based on a study of
international practices and is currently
being finalized.
TUNISIE CLEARING
6
Year highlights
► Tunisie Clearing capital increase from
3 748.275 TND to 4 414.635 TND.
► Implementation of an energy control system
which allowed an energy economy of 30%.
► Test of the ANNA Service Bureau new files
structure.
► Update and disclosure of the CSD responses to
the Association of Global Custodians (AGC)
questionnaire.
► Tunisian Central Bank Governor approval on
the implementation of Delivery vs. Payment
principle for refunding operations.
► Launch of a consultation to participants on
turnaround trades.
► Launch of a fees recovery procedure based on
automated bank debit to be applied in 2015.
Finalization of Tunisie Clearing draft rules
With reference to international
recommendations regarding the
implementation of a strong legal
framework, Tunisie Clearing has started
since 2013 the preparation of draft rules
that cover the following items:
→ Defining the CSD missions’ fundamentals
as well as key operational concepts such
as settlement finality and irrevocability.
→ Framing the CSD relationship with
participants by setting their respective
rules and obligations.
→ Reinforcing the CSD governance and
implementing the basics of a sound risk
management framework.
→ Fixing participation and securities
admission criteria.
In July 2014, the draft rules were studied
and discussed within a market committee
supervised by the Market Council.
These draft rules were translated to Arabic
and English in September 2014 and
published on Tunisie Clearing website.
In December 2014, the Market Council
College has launched a public consultation
in order to collect participants’ views and
establish final draft rules to be submitted to
the Ministry of Finance.
Implementation of the IT strategy
Tunisie Clearing has defined a short and
medium terms IT strategy that aims to
ensure business continuity, enhance IT
operations and strengthen the CSD system.
→ Different actions were taken including a
study on the IT infrastructure
renovation.
→ A mission was conferred to the firm
« Eurogroup Consulting » regarding the
assessment of Tunisie Clearing system
development. The firm established 3
scenarios of which the acquisition of a
new CSD system.
Preparation of new functioning rules
Tunisie Clearing has launched in
September 2014 the preparation of new
functioning rules with the aim to
implement rules that better describe its
operations and processes.
These rules were prepared on the basis of
a study of international practices and took
into consideration the measures provided
by the CSD draft rules as well as Tunisie
Clearing current functioning rules and
practices.
TUNISIE CLEARING
7
Year highlights
Cooperation with stakeholders
► Tunisie Clearing has delivered trainings in
collaboration with the Training Institute of
the Stock Exchange (IFBT). Topics included
repo operations and Tunisie Clearing new
services. Other trainings were delivered to
participants (1 bank and 2 brokers).
► Participation to the round table entitled
«Repo: a new opportunity for collective
investment» and to the Tunisian Central Bank
trainings on repo.
► Participation to the meetings of the stress
tests committee which is established and
directed by the World Bank.
► Participation to a meeting organized by the
Central Bank of Tunisia regarding the
strengthening of the Tunisian-British financial
cooperation.
International relations
► 3 Due Diligence visits of Global Custodians
were held at Tunisie Clearing premises.
► Tunisie Clearing hosted representatives from
the Central Bank of Congo and the Algerian
Insurance and Reinsurance Company.
► A meeting was held with the European Bank
for Reconstruction and Development during
which Tunisie Clearing gave a presentation on
its services as well as the main features of the
Tunisian Bonds market, while the EBRD
presented its activities, financial results and
financing strategy.
► Tunisie Clearing hosted the CEO of Maroclear
to study cooperation opportunities between
both Tunisian and Moroccan markets.
► With regards to the MoU signed between
Tunisie Clearing and MKK/Takasbank, a visit
to the Turkish marketplace was conducted by
a delegation of Tunisie Clearing and the
Financial Market Council.
Queries
Tunisie Clearing has responded to 27 queries received from AMEDA members and other entities.
Qu
erie
s o
f A
MED
A
me
mb
ers
(26
%) CSD insurance policies;
Pledge and lien fees ;
System maintenance ;
CSD representation in the Stock
exchange Board of directors, …
Oth
er q
uer
ies:
dat
a p
rovi
der
s an
d
con
sult
ing
firm
s (
74%
)
Punctual corporate actions
features (capital increases and
dividends payments) and
corporate actions general
processing principles (50%).
Codification of securities and
reuse of ISIN codes (20%).
Market functioning and market
making.
Implementation of the
assessment methodology and
disclosure framework for
Financial Markets
Infrastructures.
Launch of 5 new services
In November 2014, Tunisie Clearing has
launched 5 new services of which the
following:
→ Identification of local and foreign
investors at the CSD level.
→ Segregation of assets managers’ assets
from those of their depositories.
→ Management of repo operations.
TUNISIE CLEARING
8
Business key figures
Assets under custody:
28.9 Billion TND
Market capitalization:
► The market capitalization value is
17.3 Billion TND.
► 1.3% of the market capitalization is held by
collective investment.
Government securities outstanding:
► The government securities outstanding
value is of 9 441 Million TND.
► 63% of Government Bonds outstanding are
held by banks as own assets.
► 3 252 Million TND of Treasury bonds issues.
► 959 Million TND of national bonds issue.
Corporate bonds outstanding:
► 59% of corporate bonds outstanding are
held by collective investment.
► 333 Million TND of new corporate bonds
issues.
Settled operations with cash
movement: 9.5 Billion TND
► Except Central Bank operations, operations
without cash movement have a total value
of 7.7 Billion TND.
► Operations without cash movement
executed between the Central Bank of
Tunisia and banks have an average daily
value of 4.8 Billion TND.
► 4 247 operations of securities transfers
were settled with a value of 5.8 Billion TND.
Corporate actions: 3 Billion TND
Redemptions: 2 Billion TND
► 394 Million TND of corporate bonds
redemptions.
► Government securities redemptions value is
of 2 091 Million TND.
Dividends: 0.2 Billion TND
Interests payments: 0.6 Billion TND
► 503 Million TND of Government securities
interests payments.
► 503 Million TND of corporate bonds
interests payments.
The turnaround rate of Treasury bonds is
18% on the OTC market and 1% on the
stock exchange.
55 settlement fails in 2015.
TUNISIE CLEARING
9
Financial key figures
Balance sheet total: 8 149 thousand TND
Assets
► Noncurrent Assets: 2 315 thousand TND
► Current Assets: 5 834 thousand TND
Equity capital and liabilities
► Equity capital: 6 216 thousand TND
► Noncurrent liabilities: 867 thousand TND
► Current liabilities: 1 066 thousand TND
Income statement
► Revenue : (+18%) ► Operating expenses : (+18%) ► Financial revenue: (+91%) ► Net profit : (+42%)
Revenue:
► Fees on custody : 2 407 thousand TND
► Fees on settlement: 632 thousand TND
► Punctual fees: 85 thousand TND
Operating expenses :
► Employees expenses : 1 452 thousand TND
► Remuneration of intermediaries and fees:
114 thousand TND.
Profit before tax: 1 365 thousand TND
Net profit: 1 057 thousand TND
In thousand TND 2013 2014
Assets
Noncurrent Assets 2 496 2 315
Current Assets 4 808 5 834
Equity capital and liabilities
Equity capital 5 152 6 216
Noncurrent liabilities 1 096 867
Current liabilities 1 056 1 066
Total balance sheet 7 304 8 149
In thousand TND 2013 2014
Revenue
Fees on custody 2 002 2 407
Fees on settlement 516 632
Punctual fees 125 85
Operating expenses
Employees expenses 1 229 1 452
Other expenses 678 798
Profit before tax 993 1 365
Net profit 625 1 057
TUNISIE CLEARING
10
2015 Perspectives
Strengthening organizational pre-requisites to upgrade the Tunisian Central
Securities Depositories in the international environment.
Consolidate achievements and enhance business activities according to the
best practices in the securities field.
Legal framework Governance Risk management
► Training directors on best
governance practices.
► Training heads of
departments on
management skills
development.
► Establishment of a
directors chart.
► Establishment of an audit
committee within the
Board of directors.
► Preparation and
implementation of a risk
management framework
that mitigates custody and
settlement risks and which
assesses risks related to
money laundering and
terrorism financing.
► Adoption and
implementation of the
CSD draft rules
provisions.
► Finalization of accounting
standards and their study
within a market
committee.
► Finalization and
implementation of new
functioning rules.
Standardization Services Transparency
► Implementation of the
Delivery vs. Payment
principle for refunding
operations.
► Study of the
implementation of
reconciliation procedures
between the CSD and
book-keepers.
► Enhancement of the billing
application.
► Study of the Association
of National Numbering
Agencies (ANNA) new
ISIN guidelines.
► Registration with the
Internal Revenue Service
(IRS) regarding the
Foreign Account Tax
Compliance Act (FATCA)
and study of the related
reporting obligations.
► Disclosure of a report on
risk management which
includes factors that justify
the CSD rating.
► Publication of Frequently
Asked Questions.
► Enhancement of published
reportings.
► Strengthening cooperation
with foreign CSDs.
TUNISIE CLEARING
11
2015 Perspectives
A new era which strategic orientations focus on Information Technology.
Technical Infrastructure
► Implementation of short term strategy
actions:
- Redesign of the safeguard policy.
- Separation of environments (production
and test).
- Decision on the use of outsourcing.
CSD system
► Documentation of the members’ area.
► Preparation of specifications in order to
redesign the CSD system and launch of
the process.