The Barbados Central Securities Depository Inc.

           

General Information:

The Barbados Central Securities Depository Inc is a wholly owned subsidiary of the Barbados Stock Exchange Inc.

 

BCSDI is a Self Regulatory Organization which will be regulated by the Securities Commission in its administration of Clearance and Settlement Services as well as other Corporate Services for the Barbados Capital Market. 

 

-         It is a Self Regulatory Organization with its own autonomy, a Board of Directors, its own Officers, By-laws and Rules, and Participants.

-         It is administered by a Board of Directors through its officers.

-         Banking and custodial arrangements are arranged through the Central Bank of Barbados.

-         The By-laws are for the Governance of the BCSDI and impose requirements upon the participants to abide by and be subject to the Rules and Procedures of the BCSDI as well as give the BCSDI rights to disciplinary and legal action and legal relief from infractions of its rules. 

-         The Rules also describe the services of the BCSDI and the Procedures to be followed as well as the charges to be imposed for the services to be provided by the BCSDI.

-         The Participants are those entities who maintain accounts at the BCSDI.  Participants can be corporations like banks, brokers, trust companies and other financial institutions, mutual funds an insurance companies who will pay an Annual fee for the BCSDI to perform financial services and or corporate services for them.

 

 

            Clearance : Involves the transfer of title of the shares from seller to buyer in the Share Book of the Issuer.

            Settlement: The movement of the cash from the buyer to the seller and confirmation of same by the CSD.

 

A CSD is a legal entity whose principal function is to provide Clearance and Settlement services (i.e. maintain the movement of units of shares and payment thereof ) for traded shares through a process of  immobilization or dematerialization.  The CSD ensures that securities transactions are processed in a secure, computerized, book-entry environment.   As well it provides a basis for achieving efficient, transparent, low-risk Clearance and Settlement of transactions.

 

Two other roles of a CSD are:

It can act as a Depository whereby it holds jumbo Certificates in Nominee name for its participants (Issuers) who in turn hold shares on behalf of their clients / beneficiaries.  Or, maintains accounts on behalf of Participant-Brokers, Custodian Banks, Mutual Funds etc.

 

A CSD can also act as a Custodian by holding certificates in safekeeping, for  investors whether they be individuals or institutional shareholders.

 

BCSDI’s  electronic records will reflect the name of the beneficial owner until instructions are received to move those securities for any reason.

 

            BCSDI will fully dematerialize new issues of shares, where no traditional share certificates will be issued.  Evidence of share ownership will be in the form or a Statement which will rank pari passu with traditional Share Certificates. This is a move to the paperless society   With dematerialization, the BCSDI must manage the share-book after the issue and listing on the Exchange is automatic since trading of shares issued in electronic format must be done electronically.  This method of trading is very efficient, less costly and low risk. 

 

Some of the services that the BCSDI will perform are custodial and safekeeping services, process clearance and settlement transactions for trades; process new issues of securities.  BCSDI will disseminate information to investors and underwriters, processes corporate actions including dividend payments, distribute corporate reports, process bonus shares, rights issues and warrants.   BCSDI will also facilitate Primary Share Issues and Initial Public Offerings, IPOs, for large corporations and Government Paper including Treasury Bills, Bonds and other Fixed Income Securities. One very important thing to note is that the BCSDI must act impartially to all groups of participants and stakeholders.