I. Trade reporting & Clearing
In July 2015, the Stock Exchange automated its trading platform which saw the SCD integrate with the Automated Trading System (ATS), eliminating the manual process of data capture.
Trades executed in the ATS are automatically fed into the SCD system and the relevant securities accounts are updated and matched on a real-time basis (pending buy, pending sale). Transaction reports and settlement obligations are generated by SCD and made available to Securities Central Depository Agents (SCDAs) on trade date (T+0).
The SCD settles funds through a settlement bank. All settlement participants (SCDAs) are required to open a settlement account with the Settlement Bank. On settlement date, funds transfer amongst participants takes place on a net basis at the Settlement bank. Simultaneously the seller's Securities Account is debited and the buyer's Securities Account is credited in the SCD.
By implementing strict delivery versus payment within a T+3 settlement cycle, the SCD significantly improved the efficiency of the settlement mechanism in the stock market. This simultaneous exchange of cash and securities, guarantees irrevocability of settlement and offers the high level of customer protection.
III. Guarantee Fund
To ensure financial integrity in the securities market, SCD has put in place a fund which ensures that trades will be settled among the SCDAs (i.e. that the selling SCDA will deliver the securities and that the buying SCDA will effect payment)