| Malaysia | Thailand | Korea | Sri Lanka |
| 1. Clearing Function/ Central Depository | Securities Clearing Automated Network Services (SCANS) acts as clearing house.
Malaysian Central Depository (MCD) is central depository. | Thailand Securities Depository Company (TSD) acts as clearing house, central depository and Registrar. | Korea Securities Depository (KSD) acts as the central depository. Korean Stock Exchange (KSE) acts as clearing house. | Central Depository System (CDS) acts as central depository and clearing house |
| 2. Delivery & Settlement Period | T+5 for securities. T+7 for payment. | T+3. | T+2. | T+5 for buyer. T+7 for seller. |
| 3. Whether Settlement Occurs in Same-Day Funds | Settlement does occur in same-day funds as the buying broker pays to SCANS by 11:30 on T+6. SCANS will pay to the selling broker by 11:30a.m. on the same day. Selling broker will pay selling client on same day by 4p.m. SCANS indirectly guarantees payment. | Same-day funds or next-day funds depending on whether paying bank is same as bank with which payee has account or not. Presently working on plans for electronic transfer. | Payment is guaranteed by issuing bank which means payee can use funds on settlement date itself. | Settlement occurs in same-day funds. |
| 4. System of Trade Settlement and Whether DVP is achieved | Trade settlement is carried out in line with the Fixed Delivery and Settlement System (FDSS) which is administered by SCANS.
Under the FDSS, settlement is carried out on T+5. Buyer of securities will have his CDSaccount credited on T+5 and a seller's account will be debited on T+5. With regard to payment, seller will be paid by his broker on T+6 and buyer has to pay his broker not later than T+7. Shares credited into buyer's account will be held under lien until they have been paid for.
There is no DVP. | Seller must ensure there are enough securities in his account at TSD on T+3. Securities transferred from seller's TSDaccount on T+3. Delivery of cheques for payment will be made on T+3.
There is no DVP. | Delivery is done by book-entry on T+2. With regard to payment, KSD designates clearing banks and opens an account with them. Member companies of KSD also open accounts with the clearing banks. Paying broker is to deliver funds to KSD's cash account at the bank before 4p.m.
There is no DVP. | Inter-party settlement is carried out on T+7. All participants maintain accounts with the nominated settlement bank, and net settlement amounts are debited and credited accordingly.
There is no DVP. |
| 5. Evidence of Ownership | Title evidenced by book entry in investor's CDS account and in monthly statements issued by MCD. | List of owners kept and updated by depositors. | Receipt slips representing securities recorded in shareholder's book. | Monthly CDS statements. |
| 6. Rights of Depositor with Respect to Deposited Securities | Securities are immobilized in the central depository system (CDS).
MCD holds securities in name of "MCD Nominees". MCD is bare trustee and securities are held on trust for investors who are the beneficial owners. Investors receive dividends, voting rights and corporate actions.
Securities are held as part of a fungible mass.
Investors still have the right to obtain scrips equal to their book-entry holdings of a security through withdrawal from the CDS. However, once scrip is withdrawn, it cannot be used to settle a trade unless it is redeposited into the CDS. | Depositors have to open depository accounts with TSD. Securities deposited are registered under the name of "Thailand Securities Depository Co. Ltd for Depositors".
Securities are presumed to be securities held by TSD on behalf of depositor. | Depositors have co-ownership rights. | Securities held by CDS are dematerialized although they could be materialized if investor wishes to have physical security.
Under the dematerialized system CDS is registered owner and holds securities on trust for depositor who is beneficial owner. |
| 7. Rights of Creditors with Respect to Deposited Securities | Securities are held on trust for investors, therefore neither creditors of MCD nor creditors of brokers can attach securities. | Neither creditors of TSD nor creditors of depositors shall have right to claim over securities. | Creditors do not have right to claim over securities. Deposited securities are separated into broker and client components. | CDS maintains individual accounts in name of beneficial owner so that neither creditors of CDS nor of brokers can attach securities. |
| 8. Regulatory/Legal Structure | Securities Industry (Central Depository) Act, 1991 (SICDA). Rules of SCANS.
Rules of MCD. | Securities & Exchange Act Rules of the SET and TSD. | Securities & Exchange Act Stock Exchange Market Transactions (Operating Rules). | Rules of the CDS. |
| 9. Is Stock Borrowing and Lending Permitted or Practiced | Although SBL is permitted, it is not currently practiced to facilitate settlement of failed trades due to trade mismatch. | No. | Yes. | No. |
| 10. Bankruptcy & Insolvency | Bankruptcy Act, 1967 and Insolvency law provisions in the Companies Act 1965.
S.126B of Securities Industry Act provides that provisions of Bankruptcy Act & insolvency law are disapplied in event of broker default or insolvency of broker or clearing house. | Bankruptcy Code applied in event of insolvency of broker & clearing house.
Securities held in account of broker on behalf of the client could be seized by official receiver and held until the client proves that he is infact the actual owner of the securities. This does not apply to securities held in the name of TSD. | Bankruptcy Law.
Securities deposited with KSD are fully protected against any claims from creditors of insolvent broker as KSD is required by law to set client's assets apart from those of broker. | No specific laws governing bankruptcy and insolvency. |
| 11. Pledging | Securities can be pledged by being transferred into securities account of pledgee, "Pledged Securities Account". Any instruction from pledgee with regard to disposition of pledged securities must be supported by documents evidencing pledge in his favour. | Securities can be pledged by transferring securities into "Pledge Account". Securities held in such account cannot be withdrawn or transferred until revocation of pledge by pledgee. | Securities can pledged by marking on pledgor's account. | Sri Lankan Mortgage Act does not recognise dematerialized securities for purpose of pledging. |
| 12. Finality of Transfers and Unwind Risks | S.35 of SICDA provides that depositor whose name appears in the record of depositors is deemed to be owner of the security, notwithstanding provisions of the Companies Act. With regard to unwinding, see Q10 above. | Problematic transactions can be unwound, separated and settled outside the netting system. | No provisions with regard to unwinding of securities or funds transfers. | Transaction can be unwound if there is any error in data entry or on mutual agreement of both brokers with valid reason. |
| 13. Risk Management Features | Capital requirements, minimum liquid funds. | Clearing fund, collateralization, minimum capital requirement, net capital rule. | | Deposits made by participants in CDS system deemed to be sufficient to prevent risk of systemic failure. CSE guarantees settlement of all transactions. |
| Brazil | Mauritius | South Africa |
| 1. Clearing Function/Central Depository | CALISPA processes clearing and settlement for the Sao Paulo Stock Exchange.
CLC processes for the other 8stock exchanges, and is controlled by the Rio de Janeiro Stock exchange.
Financial settlement is provided by CETIP. | Central Depository & Settlement Co. Ltd which acts as clearing house and central depository. | Equity Clearing House (ECH) acts as clearing house. There is currently no Central Depository. |
| 2. Delivery & Settlement Period | T+3. | T+5. | Settlement is on a T+7 fixed settlement day basis. |
| 3. Whether Settlement Occurs in Same-Day Funds | Settlement occurs in next-day funds. | Yes. | Settlement occurs in next day funds. Presently developing a National payment system. |
| 4. System of Trade Settlement and Whether DVP is Achieved | Transfer of securities is conducted overnight from T+2 to T+3 via book-entry. Securities are blocked until payment occurs on T+3 through the CETIP system.
Net amount is then sent to the Bank of Mauritius (Clearing Bank) for final debit and credit between the Settlement banks. Once Bank of Mauritius confirms that funds settlement has occurred, CDStransfers securities between the securities accounts on T+5. | Trades are matched and entered into system on trading floor. Netting of cash is done at Settlement bank level. | Securities are delivered physically, with the scrip accompanied by a signed transfer deed being delivered against the cheque payment. |
| 5. Evidence of Ownership |
| Evidence of ownership is evidenced by statement issued by CDS. | Ownership is recorded in a scrip based registration system. |
| 6. Rights of Depositor with Respect to Deposited Securities | Securities are held on fungible basis with the central depositories with segregation of accounts at the customer level and with securities recorded in the name of the individual customers. At the registrar level, the central depository appears as the fiduciary stockholder. | Securities are immobilised in the CDS. Securities Accounts are maintained by the CDS in the names of depositors, and reflects the beneficial ownership of the securities by the depositors. | All scrip must either be in the name of the beneficial owner or marked accordingly for identification if in a nominee's name. Records of managed accounts and nominee dealings of brokers are audited regularly and are subject to strict rules of procedure and disclosure. |
| 7. Rights of Creditors with Respect to Deposited Securities | Segregation of accounts is practiced within the depositories to ensure investor protection. | S.17 of the CDSAct does not allow creditors of CDS or of stockbroking firm to attach securities belonging to investor. | Segregation of own and clients' funds ensures protection of clients funds and assets as clients assets are separate and distinguishable. |
| 8. Regulatory/Legal Structure | Law6404/76 (The Corporation Law)-grants ownership rights, Law6385/76-confers CVM power over clearing and settlement. | Securities (Central Depository, Clearing and Settlement) Act30 of 1996. | Financial Services Board Act, No.97 of 1990.
Stock Exchanges Control Act, No.1 of 1985.
Financial Markets Control Act, No.55 of 1989. Inspection of Financial Institutions Act, No.38 of 1984. |
9. Is Stock Borrowing and Lending Permitted or Practiced | National Monetary Council (CMN) Resolution2286/96 allows SBL, while CVMInstruction249/96 governs it. | Securities borrowing and lending is permitted. | There are securities lending and borrowing facilities available. |
| 10. Bankruptcy and Insolvency | Decree-Law7661/45, Law6404/76, Law7492/86.
Segregation of securities ensure customer protection. | Bankruptcy Act.
CDSAct makes provision for the CDS to realise the assets of the insolvent or bankrupt participant. | There are laws and rules concerning bankruptcy.
Segregation of own and clients funds ensures protection of clients funds and assets from the insolvency process. |
| 11. Pledging | Securities can be pledged as guarantee for open contracts. It is clearly defined in the agreement between the intermediary and client that the securities pledged as collateral may be liquidated if the client fails to fulfill the obligations. | Securities can be pledged by crediting them into the pledgee's Collateral Account and recorded in the pledgor's Pledge Account. They are dealt with strictly and exclusively in accordance with the instructions of the pledgee Participant, without regard to the pledgor participant. | Pledging is done by lodging the prescribed pledge form along with the securities with the bank of the pledgee. The pledged securities must be tagged to identify them and the nature of the pledge, and must remain at the bank where they are kept separate from other non-pledged securities being held in safe custody. |
| 12. Finality of Transfers and Unwind Risks | Transaction could be unwound if trade is not done in accordance with market disclosure regulations. Request for unwinding could be done from the SC or Stock Exchange itself. | Unwinding of trades or funds is not allowed. In the case of a default, the CDS will step in using the Guarantee fund. |
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| 13. Risk Management Features | Clearing member standards, collateralisation, risk based margining system (RADAR). | Settlement limits, Guarantee fund, membership standards. | Capital adequacy requirements, Guarantee Fund, Fidelity Cover. |
