The Depository holds securities in electronic form and provides custody and settlement services to investors through their brokers. The accounts that hold these electronic securities are called JCSD accounts and are created and approved by the broker. The time it takes to open a JCSD account is totally dependent on the broker’s internal processes, but once these accounts have been approved then transactions can be processed immediately.
The JCSD’s Depository Services Unit is responsible for processing any transaction requested by the investor, through their broker, on securities that are in our custody. These services include:
- Depositing of share certificates
- Withdrawal of securities
- Settlement of securities
- Pledging of securities
- Pledge release
- Movement of securities between brokers and CSDs
- Inter member movement
- Intra member movement
- Inter CSD movement
- Change of address
- Audit confirmation
Depositing of Share Certificates
Investors deposit their share certificates into the JCSD to allow for easier transfer of shares. It is also safer and more reliable to deposit securities, as it eliminates loss of certificates and prevents inconvenience in the process of transferring securities.
Each security deposited in the depository has a unique alphanumeric code that identifies it. This code is called an International Securities Identification Number (ISIN). The numbers ensure a consistent format so that holdings of investors can be tracked consistently across markets worldwide.
The process for depositing a certificate is very easy and it begins with the investor selecting a broker who will manage their JCSD account. Once the broker has been engaged and the requisite account opening documents are completed, they will open an account at their brokerage house and at the JCSD to deposit the shares. The investor is required to submit the original share certificates along with a duly completed transfer form signed by all holders reflected on the share certificate(s). The broker will submit these transfer documents along with the JCSD account number to us for processing.
Before the JCSD can process the deposit, the Registrar who acts on behalf of the Issuer, will need to verify that the certificates are valid and will transfer the shares into our street name/nominee name. A certificate in our street name will then be issued and sent to us. Once the JCSD has received this certificate then we are able to credit the investor’s account with the total number of shares that the certificates represented. The investor is now able to sell the shares that were deposited or to purchase additional shares in their JCSD account.
Withdrawal of Securities
In the same way that investor(s) can deposit shares into the JCSD they can also withdraw their shares from the JCSD and request that a certificate is issued in their name. Once these shares are withdrawn, all the benefits that would have been associated with having shares held in electronic form are lost. In particular, investors will not be able to trade these shares over the exchange.
The process is as follows:
- The investor would request the withdrawal through their broker.
- They would be required to submit a transfer form signed by all persons who are on the JCSD account.
- The broker will submit the transfer documents to the JCSD from where they will be forwarded to the Registrar so that the shares can be transferred from the JCSD’s nominee account back to the investor.
- A share certificate will be issued, by the Registrar, in the name of the investor.
- The JCSD will debit the shares from the investor(s) account.
Settlement of Securities
The JCSD is responsible for settling all trades that take place on the floor of the JSE. The JCSD uses a T+2 settlement cycle which means that trades are finalized two days after trade day. For the trades to be finalized, cash and securities must move and so the JCSD stands in the middle of the settlement process (as central counter party) to ensure that all brokers are paid before any security is moved from the sellers to the buyers account.
Pledging of Securities
An investor may use securities in their JCSD account as collateral, to secure a loan at a financial institution. The investor will need to confirm that the financial institution is a participant in the JCSD’s Collateral Loan Programme. If they are not a participant, they may apply.
The investor will complete the pledge form and submit to their broker. The form must be signed by all holders on the JCSD account. The broker will check the details on the pledge form and submit to the JCSD for processing. Upon receipt we will process and then inform the financial institution that the pledge is in place. Investors will not be able to transfer/sell any securities that have been pledged, however, they will continue to receive any benefits that are associated with the security such as dividends/interest payments, stock splits, bonuses.
To have a pledge released, the financial institution will authorize the JCSD, in writing, to release the shares. This letter must be signed by two authorized signatories of the financial institution and must be on their letter head. The JCSD will inform the financial institution once the pledge is released.
Movement of Securities between Brokers and CSDs
An investor may choose to move their portfolio/securities to another broker or CSD or between accounts at their broker, if the accounts are in the same name.
Inter Member Movement
A movement from one broker to another is called an Inter Member Movement. The investor will authorize their broker in writing to move the portfolio from their brokerage house to another broker. The broker from which the portfolio will be removed will prepare an inter member movement form, sign, stamp and forward to the broker to which the portfolio will be moved (receiving broker). The receiving broker will complete their section of the form then sign, stamp and forward to the JCSD for processing. The receiving broker is charged for this transaction.
Intra Member Movement
A movement between accounts at a broker is called an Intra Member Movement. This movement is normally used to consolidate accounts that have been created for the same named investor. The broker will submit the intra member movement form to the JCSD for processing.
Inter CSD Movement
A movement of securities between CSDs is called an Inter CSD Movement. Currently the inter CSD movement is used between the JCSD, Trinidad & Tobago Central Securities Depository (TTCD) and the Barbados Central Securities Depository (BCSDI) for cross-listed securities. The investor instructs the broker to move the securities and the broker prepares the inter CSD movement form and submits to the JCSD or other CSD for processing. Once the securities have been moved (normally done same day) the investor is able to trade on these securities. In the background the Depository and the Registrar will finalize the transferring of the securities to the respective depository.
An investor may provide instructions on the treatment of their dividends or interest payments. The investor may choose to:
- Provide authorization for their dividend/interest payment to be credited to their bank account.
- Provide authorization for their dividend/interest payment to be paid to a third party.
- Provide authorization for the dividend/interest payment to be held at the paying agent’s office for collection.
The investor will use the Investor Instruction Form to request an addition of a mandate. The steps are as follows:
- Select electronic deposit.
- Add JCSD account number.
- Select “Update all Holdings on Account” if the mandate is to be applied at the account level. If the mandate is only to be applied to specific symbols then this should be added on the line provided.
- Complete Section 1 and ensure that the correct type of account and currency is selected. If the investor has securities that pay USD dividends, then a USD bank account number should be provided. If a USD bank account number is not provided and a JMD mandate is added at the account level, then the Registrar will send all dividends to the JMD bank provided. The bank will convert the funds to JMD to facilitate crediting of the account.
- Add contact details, TRN and date of birth.
- Sign and submit to your broker who will forward to the JCSD for processing.
Change of Address
If the investor(s) has/have moved from the address that is on the JCSD account, they must provide us with the new address to update our system. If this is not done, the investor will not receive communication sent by mail from the JCSD, Registrar or Issuer.
The investor will use the Investor Instruction Form to request a change of address. The steps are as follows:
- Select change of address.
- Add JCSD account number.
- Select “Update all Holdings on Account”. Addresses are changed at the account level
- Complete Section 2 indicating previous address and current address.
- Add contact details, TRN and date of birth.
- Sign and submit to your broker who will forward to the JCSD for processing
Companies with JCSD accounts may request that their holdings are confirmed to their auditors. A written request must be submitted to the JCSD indicating the name and address of the auditors and the date at which the holdings are to be confirmed.