Central Securities Depository Research Articles

PENGARUH KEMAJUAN TEKNOLOGI INFORMASI DAN PENGETAHUAN INVESTASI TERHADAP MINAT INVESTASI GENERASI MILENIAL DI PASAR MODAL

The number of millennial or forces born between 1981-2000 according to the 2017 National Socioeconomic Survey (Susenas) counts 88 million people or 33.75 per cent of Indonesia's population (BPS). PT Indonesian Central Securities Depository (KSEI) noted that young people or millennial generation still count the number of investors in the Indonesian capital market. Throughout 2018 the number of young investors reaching 21-30 years won 39.72% of the number of investors. Therefore BEI participated in using the Indonesian Central Securities Depository (KSEI) & securities companies began to hold a variety of lessons ranging from talk shows, seminars to workshops & capital market schools (SPM) information technology and investment knowledge. This research method is a causal relationship research with quantitative data with SPSS tools. contributing to this research were students of the faculty of economics and business at the University of Muhammadiyah Tangerang with a sample of 92 respondents. the results of this study indicate the fact that the development of information technology is significant to the investment interests of millennial. While investment knowledge has a positive and significant impact on investment interests in millennial.

ANALYSIS OF INVESTOR BEHAVIOR IN THE ISLAMIC CAPITAL MARKET WITH AN APPROACH TRA (THEORY OF REASONED ACTION)

The development of the capital market in Indonesia is very significant, with the implementation of the Yuk Savings Stock campaign to increase the number of domestic investors in Indonesia. The Indonesian Central Securities Depository (KSEI) noted that as of August 9, 2019, the number of capital market investors reached 2,070,394 people, an increase of 27.8 percent from the position in December 2018. This study aimed to find out and analyze Investment Knowledge on Attitudes, Investment Motivation on Attitudes, Perceptions of Risks towards Attitudes, Attitudes Influence Interests, Subjective Norms Affect Investment Interests, and Investment Interests Affect Investors Behavior in Sharia Capital MarketsThe population in this study are Islamic Capital Market investors in the DIY & Central Java region. Samples taken in this study are some Shariah Investors in DIY & Central Java, which total 213 respondents. Sampling using non-probability techniques with convenience sampling method and research models will be analyzed using Structural Equation Model (SEM), using the help of AMOS software.The results of this study indicate that investment knowledge has a significant negative effect on attitude, investment motivation has a significant positive effect on attitude, perception of risk has a significant negative effect on attitude, attitude has a significant positive effect on interest, subjective norms has a significant positive effect on interest and interest has a significant positive effect on investor behavior.Keywords: Investment Knowledge, Investment Motivation, Risk Perception, Attitude, Subjective Norms, Investment Interest, Investor Behavior

PENGARUH EDUKASI PASAR MODAL TERHADAP PERSEPSI RISIKO DAN MINAT BERINVESTASI MASYARAKAT

The majority of our society is not yet aware of the benefits of investing. They emphasize more importance to support life now without understanding the future. In Indonesia, based on data as of December 2018, only around 1,617,367 million were approved as independent shareholders in the Indonesian Central Securities Depository. The ratio is not even up to 0.5 percent of the total population of Indonesia. Market information and market knowledge are the main things. Today many countries agree to investment plans that want to increase domestic and international investment. This study aims to reveal the effect of capital market education on risk perceptions and community investment interests. Researchers want to look at the factors that influence the interest of investing in the community who incidentally do not have experience in investing in the stock market capital. This study uses primary data that is a questionnaire collected from participants, using a quasi-experimental technique in which participants are people who take part in voluntary capital market school activities at the Indonesian Stock Exchange KP Denpasar. The method of processing data uses path analysis. The results of this study capital market education has a positive influence on people's perceptions of interest and investment interest. While the perception does not have an interest in the interests of investing in the community.

Republic of Moldova

As part of the IMF’s Data for Decisions (D4D) Trust Fund Project, a technical assistance (TA) mission was conducted by John Joisce and Dario Florey, IMF Experts, during September 23–October 4, 2019, to help the authorities of the Republic of Moldova in developing sectoral financial accounts and financial balance sheet statistics (FABS). The mission was the follow up to the mission held in December 2018, and evaluated the progress made since the last mission against the objectives set out in the action plan. The mission worked principally with the National Bank of Moldova (NBM), but also had meetings with officials from the Ministry of Finance (MOF), the Central Securities Depository (CSD), the National Commission for Financial Markets (NCFM) and the National Bureau of Statistics of the Republic of Moldova (NBS).

Towards a more integrated primary issuance market for securities in the EU: Legal and policy issues

In the wake of the second decade of the 21st Century, European securities markets remain fragmented along national borders in terms of the rules, procedures and practices that regulated markets in different Member States apply for the primary issuance and distribution of transferable securities. This paper explores how the creation of a European Central Securities Depository for the primary issuance and distribution of securities across the European Union could help overcome fragmentation in the primary issuance market. We conclude that, even if desirable, the creation of a European Central Securities Depository could only achieve its objectives in combination with the introduction of a de minimis body of European private securities law to complement and render its creation meaningful and effective. It is the introduction of precisely such a body of law that would represent the most significant (even if only indirect) contribution of a European Central Securities Depository towards more harmonisation in primary issuance processes across the European Union.

THE IMPACT OF THE 2009 INDONESIA’S DIVIDEND TAX CUT ON DIVIDEND PAYMENT

On January 1, 2009 the effective tax rate for individual-recipient dividend fell significantly from 35% to 10%. This paper investigated the impact of the dividend tax cut policy on dividend payment in three aspects i.e. extensive margin, intensive margin and dividend per share amount, an adoption from Chetty and Saez (2004) approach. I used publicly available data provided by The Indonesian Stock Exchange and The Indonesian Central Securities Depository. I found that one year after the tax cut policy, the fraction of the firms paying dividend increase and reach its peak in 2011. From intensive margin approach, the percentage of firms that increase their dividend per share amount also increase one year after the policy. Using regression analysis, this paper also found that the tax cut policy increased the dividend per share amount by 35.03. This study, to my knowledge, provides the first empirical evidence of the effect of dividend tax cut policy and concludes that the policy has positive impact on dividend payment in term of fraction of firms paying dividend, fraction of firms increasing their dividend and the nominal amount of the dividend per share.

The European post-trade infrastructures after Brexit: A central securities depository perspective

This paper tries to imagine the Central Securities Depositories’ (CSDs) perspective for the next five years (2025). Brexit seems, at the writing of this paper (ie beginning of September 2019), an immediate milestone for all European financial markets, and as such will impact CSDs’ business. The paper starts by analysing different consequences of Brexit. In the end, one of the main conclusions is that Brexit will not be a zero-sum game among European financial markets, but a losing game for all of them. Europe will lose as a whole in favour of other regions due to increasing competition and globalisation. This idea is further reinforced by different political and economic threats for Europe: populism, nationalism, protectionism and the turndown of the economic cycle draw a pessimistic forecast for investment flows coming to Europe. Obviously, this negative economic perspective might hinder core CSD business. At the same time, CSDs have to cope with many new regulations (Central Securities Depository Regulation [CSDR], Shareholders Right Directive 2 [SRD2], etc.) and public initiatives (Eurosystem projects) with the real risk of dedicating many resources to fulfil risk-related public requirements, but not being able to follow the path of new technologies. New technologies will probably shape the CSD business in five to ten years’ time. As a result, European CSDs should be able to focus on new business paradigms that digitalisation will bring us. Threats and opportunities will stem from the new technology: distributed ledger technology, robotics and big data. Finally, this paper briefly mentions some of the opportunities and challenges that CSDs will likely have to cope with, from today until 2025.

AN OVERVIEW OF INSIDER TRADING IN BORSA ISTANBUL

W e analyze insider trading patterns in firms listed in Borsa Istanbul using a unique and most comprehensive regulatory dataset for the first time. The dataset provided by Turkey’s Central Securities Depository contains the number and volume of insiders’ buy and sell transactions during the period 2009 – 2015. We observe that (i) corporate insiders are active traders in Turkish stock market, (ii) the trading patterns vary across different sized firms, and finally, (iii) insiders at different positions trade differently. This study enhances understanding of insider trading behavior in an emerging market. Furthermore, our results have important implications for regulatory authorities who are responsible to maintain well-functioning financial markets which will facilitate increased prosperity and economic growth.

Technological innovations as a factor driving the evolution of central securities depositories’ business

The consistent trend towards dematerialisation and key business process automation in securities markets, developing around the world over the last years, has shaped the business model of an average present-day central securities depository (CSD). This paper analyses the impact that technological innovations have on the business of CSDs, assess the nature of that impact and figure out what lies ahead for CSDs in the age of technological revolution and transformative changes.

How a market infrastructure is developing in a competitive environment: Can new technologies be a differentiator?

The new operational and regulatory framework has had a direct impact on financial market infrastructures (FMIs) with the need to be a more client-oriented organisation, able to cope with increasing competition, and to take advantage of new opportunities to grow. This paper describes the journey that Monte Titoli is charting as a central securities depository (CSD) and the opportunity to leverage on new technologies to differentiate itself from the competition and be closer to clients. The introduction of new technologies has to be carefully planned holistically and requires a change of culture and behaviour. The first challenge is to disseminate a new culture and develop a bottom-up approach throughout the entire organisation. Technology is effective if it supports the business model, and that is what Monte Titoli has been addressing with the development of a three-year plan to introduce robotic process automation (RPA) for process excellence, to enhance efficiency, become volume insensitive and minimise operational risk and digitalisation in order to make better use of data.

Early Health, Risk Aversion and Stock Market Participation

To examine the relationship between early health status and financial decisions in adulthood, we link information on birth weight in 1966 from the Northern Finland Birth Cohort to data from the Finnish Central Securities Depository over the period of 1995-2010. We find that persons predisposed to poor health status in early childhood (indicated by low birth weight) avoid participating in the stock market in adulthood. The link between birth weight and stock market participation is partially explained by the fact that poor early health status leads to risk aversion. Early health status is not significantly related to the portfolio's value-growth tilt.

Provision of Central Securities Depository Services in Another EU Member State in CSDR

Central securities depositories represents important element of the financial market system of institutions. CSDs performs two very functions – they act as central notary parties as well as the settlement systems for transactions with financial instruments. This contribution analyses the aspects related to the CSD cross-border operations under the regime of CSDR. Initially, brief introduction to CSD role and to the EU regulation on CSD is provided. Furthermore, the aspects of CSD standardization within the EU and the conditions for cross-border operations are reviewed in a detail. In the next part of the contribution, aspects of issuers’ freedom of issuance and issuers migration are subject to an analysis. Finally, selected interrelations of CSD cross-border operations and the Brexit are described.

Zero-Coupon and Forward Yield Curves for Government of Ghana Bonds

This article seeks to provide a framework for modeling daily zero-coupon yield curve for Government of Ghana bonds based on secondary market daily trades. It also proposes method for modeling the forward yield curve. The current practice in Ghana is to produce yield curve for Government of Ghana bonds based on primary market weekly auctions. This article demonstrates the extraction and fitting of secondary market daily yield curves for Government of Ghana bonds, using bootstrapping and piecewise cubic hermite interpolation. The article also compares the piecewise cubic hermite method with the piecewise cubic spline method, the Nelson–Siegel–Svensson model, and the penalized smoothing spline method. Data used are the daily bond price data from the Ghana Fixed Income Market, accessible at the Central Securities Depository of Ghana. The results show yield curves that reflect the actual daily yield movements in the secondary bond market of Ghana. The results also show that the piecewise cubic hermite method fits the zero-coupon yield curve better than the other methods as far as the Ghanaian bond market is concerned. For the forward curves, we recommend that either or both of the piecewise cubic hermite method and the Nelson–Siegel–Svensson method could be used by the market participants.

Synergies, Risks and the Regulation of Stock Exchange Interconnection

In this article, the author discusses the phenomenon of stock exchange interconnection and the synergies that it can bring. He investigates the methods and rationales behind various models currently employed such as the Euronext virtual model, the integration between the London Stock Exchange and the Milan Stock Exchange, and the ASEAN model in Asia. Despite the fact that there are many models of interconnection, none of them are truly interconnected in that they share a common trading platform, a single clearing house, and a single central securities depository. Divergence in national law remains a major obstacle to interconnection. This is because, notwithstanding a certain degree of harmonisation achieved in jurisdictions such as the EU, national laws continue to play an important role in regulating financial market infrastructure such as stock exchanges. Therefore, without a clear regime governing jurisdiction and applicable law, true interconnection is unlikely to be achieved.

The importance and principles of functioning of the Central Securities Depository and Clearing House of Serbia

Central Securities Depositories (CSDs) are special financial institutions crucial for the successful functioning of financial markets. Initially, these institutions were limited to performing the tasks related solely to the registration of issued securities, however, over time their scope of activities has grown and today these institutions also act as clearing houses and provide clearing and settlement services. In order to achieve their core functions efficiently, Central Securities Depositories follow the prescribed international standards and principles. It is vital to network these institutions and have them join international organizations and associations focusing on the development of mutual cooperation and stronger integration. Integration processes involve the harmonization of regulations relating to the functioning of this particular segment of the financial market. By undergoing a process of consolidation, the Central Securities Depository and Clearing House of Serbia (a joint stock company) managed to harmonize its operations with the relevant EU, as well as the international standards and regulations, and is actively involved in a number of European and international organizations and associations that are relevant for its operations.

Rynek po kryzysie. Nowe usługi post transakcyjne w odpowiedzi na rozporządzenie EMIR

The paper discusses the impact of Regulation (EU) No 648/2012 of the EuropeanParliament and of the Council of 4 July 2012 on OTC derivatives, central counterpartiesand trade repositories on post-trade infrastructure of the financial market.In particular, it focuses on central counterparty (CCP) clearing houses definedin the Regulation, as well as the subjective and objective scope of application ofEMIR. The paper also refers to the impact of the Regulation on the Polish market,as well as the measures taken by the local post-trade infrastructure institutions:the Central Securities Depository of Poland (KDPW) and the clearing houseKDPW_CCP.

Personality traits and stock market participation

Abstract We analyze the relationship between personality traits and stock market participation. Our sample comes from combining personality trait scores and socioeconomic status information from the Northern Finland Birth Cohort 1966 with data from Finnish Central Securities Depository, the official register of stock holdings in Finland. We find the traits, and especially the subscales of the traits, to be significant predictors of stock market participation. In particular, exploratory excitability, extravagance, sentimentality, and dependence have large effects. One-standard-deviation changes in the subscale scores have marginal effects of up to 4 percentage points on the probability of participating in the stock market.

Cross-border securities settlement in Europe: Improvements so far

The post-trade market in Europe is still fragmented. Differences in market practices have led to inefficiencies in a cross-border context. Integration of the European post-trade industry should lower cross-border settlement costs to the level of domestic transactions, while breaking down the Giovannini barriers by market parties should improve European Union (EU) clearing and settlement arrangements. This paper focuses on the efforts of the post-trade industry regarding the Giovannini industry-related barriers and what has been achieved so far. The market parties are well on track. The post-trade industry has introduced several standards and harmonised procedures to which they have committed themselves. Costs and prices of both domestic and cross-border transactions have come down. Regulation (Central Securities Depository (CSD) Regulation, Securities Law Legislation etc) can help to further improve efficiency in the post-trade environment and enhance market integration, in addition to the Eurosystem TARGET2-Securities (T2S) platform, which will provide cross-border securities settlement as of June 2015 in Europe in central bank money (e). Further harmonisation — both within and outside of the context of T2S — is needed, which ultimately should lead to more efficiency and lower costs in the EU.

TARGET2-Securities: A platform for solving some of the key structural issues raised by the financial crisis and its aftermath

Despite the increased level of attention the TARGET2-Securities (T2S) system is receiving from market participants, many still believe that T2S is just a settlement system, a piece of software that will not deliver product capabilities fundamentally different from those available today. It is indeed true that T2S is just a settlement platform, but it is the only platform that allows domestic settlement and cross-border settlement to be effected in exactly the same way. Several of the features of the platform do not exist today in a number of incumbent central securities depository (CSD) platforms (eg auto-collateralisation, partial settlement, netting and complex algorithms to maximise the number of trades which may be settled given the available cash). In addition, T2S will alter the post-trade landscape on a permanent and positive basis, principally as an enabler for new products and services, but also by dramatically changing the context within which existing products and services are delivered. Market participants must challenge their existing operating models and leverage T2S in the deployment of their products, in pursuit of their wider business goals. The level of practical and technical project adaptation currently being undertaken varies greatly by client segment. Research discussed in this paper suggests that many are still trying to understand some of the wider implications, beyond cross-border settlement efficiency, and are yet to mobilise the necessary resources to maximise the opportunities T2S will enable. It is a pressing issue as the platform will be launched in phases between 2015 and 2017. Major IT developments will have to be carried out in 2014 to be ready for the first wave, leaving only one budget cycle between now and then for approval of funding for necessary adaptation.

Optimal central securities depository reshaping toward TARGET2-Securities

TARGET2-Securities (T2S) is the single and harmonized IT platform for securities settlement in central bank money, developed by the Eurosystem to promote integration in the European post-trading industry, and will go live in 2015. Central securities depositories (CSDs) joining T2S thus face the need to determine the degree to which they should reshape, that is, adapt their own IT infrastructure, human resources and business strategy to T2S. A more complete reshaping entails higher immediate fixed costs, but allows us to benefit the most from the cost reduction allowed by T2S. In this paper we use a game-theoretic approach to model the strategic choice of the CSDs. We then derive several results from this model. In particular, we give closed-form solutions for the degree of optimal reshaping and the optimal prices set in the unique equilibrium if the time horizon is finite. In the case of an infinite horizon we give a sufficient and necessary condition for the existence of another subgame perfect Nash equilibrium in which CSDs continually delay the decision to reshape.We argue this equilibrium is not robust and provide a condition under which a given CSD will always reshape, whatever the other CSDs'strategy. We note that by adjusting the cost function and the interpretation of the reshaping parameter, the same game-theoretic framework can be used to model the decision to join or not to join T2S.