This was stated today by Dr. Wenhua Dai, ex-chairman of the Asia-Pacific Association of Central Depositories (ACG).

More than 200 foreign experts participated in the 26^th ACG in Almaty from September 9 to 12, 2024.

This year for the first time, Kazakhstan received the right to hold the 26th ACG Annual General Meeting in Almaty. It was attended by the representatives of more than 40 depository, exchange and clearing organizations from around the world. The organizer was the Central Securities Depository (KCSD). ACG participants discussed the topical issues of the modern development of the world’s financial markets, including international cooperation, transition to T+1 regime, digitalization of industry and many others.

Chairman of KCSD Adil Mukhamejanov emphasized it is a great honour to hold such an important event in Kazakhstan. According to his words, the central depositories around the world are undergoing important changes now. Thus, new technologies are being introduced in Kazakhstan, the operational structure of KCSD is being improved, and there is an increase in the quality and expansion of services for customers and stakeholders. However, effective transformations, sustainability and risk reduction require cooperation with foreign colleagues and the exchange of ideas and experience, noted Mr. Mukhamejanov.

On September 11, 2024, at the meeting in Almaty, a ceremony was held to delegate authority to Akber Badiuddin, CEO of the Central Depository Company of Pakistan Limited as the new head of the ACG.

Mohammad Baghestani, CEO of the Central Securities Depository of Iran was also elected as the new Vice-Chairman of the ACG.

Dr. Wenhua Dai thanked all the guests and organizers of the conference for participating in the event and making a great contribution to its work. “While it is golden autumn in Almaty, we successfully completed the 26th Annual ACG Conference, thanks to the warm hospitality of our hosts and the beauty of Kazakhstan,” Dr. Wenhua Dai said at the end of the conference.

“We all have wonderful memories. As we approach the 27th anniversary of the ACG and reflect on the path we have travelled, we see economic wonders in the Asia-Pacific region. This is the development of politics, economics, culture and globalization in Central Asia. The active participation of KCSD in the management of financial infrastructures in the Asia-Pacific region and at the global level shows that Kazakhstan will increasingly attract the attention of the world community in future economic development.”

The honorary guests of the 26th Annual General Meeting ACG  in Almaty were the heads of the National Bank of Kazakhstan, ARDFM of the Republic of Kazakhstan, Deputy Managing Director of the International Monetary Fund (IMF), heads of the departments of Clearstream, Euroclear, Depository Trust&Clearing Corporation, China Securities Depository and Clearing Corporation, Taiwan Depository&Clearing Corporation, Hong Kong Exchanges and Clearing Limited, KASE, AIFC, International Securities Services Association, PT. Custodian Sentral Efek Indonesia and many other respected experts.

Sponsors of the event: Visit Almaty, Freedom Broker, Elide Securities, KASE, Tengri Partners, Qanot Invest, Montran, Eurasian Development Bank, Wanli Stone.

Reference:

ACG is an association of central depositories of the Asia-Pacific region, established in 1997. Its main goal is to cooperate in various sectors to improve efficiency in clearing and settlements. KCSD has been a member of the Asia-Pacific Association of Central Depositories for 17 years (since 2007). KCSD is a key infrastructure organization of the Kazakh financial market in post-trading services and has been providing services for more than 25 years. It is a single centre for recordkeeping for securities ownership rights, performs calculations for all exchange and over-the-counter transactions, and provides access to international securities systems for local participants.

As of January 1, 2024, the total volume of financial instruments in nominal holding in KCSD amounted to KZT 126.61 trillion, an increase of 13.9% over the year. The number of securities issues on depository services has also increased, amounting to 2,386 issues at the beginning of 2024. As of today, more than 3 million brokerage accounts have been registered with KCSD.

Export Credit Agency of Kazakhstan participated in the IfTI 2024 Global Symposium in Switzerland. This international event brought together experts to discuss the future of global trade in the context of climate change and digitalization.

Key topics included the transition to a green economy, achieving carbon neutrality, and digitalizing world trade. Participants explored how these factors are shaping the global economy.

During the symposium, Ayan Bektybayeva, Deputy Chairman of the Board of Export Credit Agency of Kazakhstan, spoke at a panel session on the future of export financing. She shared Kazakhstan’s experience in supporting exporters and discussed new initiatives aimed at achieving sustainable development goals.

“By contributing to emissions reduction and focusing on environmentally friendly projects, Kazakhstan is demonstrating its commitment to global sustainability goals,” said Bektybayeva. “Supporting exporters implementing innovative environmental solutions is an investment in our country’s future. By providing export financing for such projects, the Export Credit Agency of Kazakhstan helps businesses explore new markets, strengthen their competitiveness, and reduce financial risks.”

In 2023, Export Credit Agency of Kazakhstan joined the Net Zero Export Credit Agencies Alliance (NZECA) as an affiliated participant. The relevant document was signed at the COP28 World Climate Summit.

Alina Aldambergen, Chairperson of KASE, emphasized the importance of creating conditions on foreign markets for domestic companies to issue bonds. She made this statement during a panel session at the 26th Annual General Meeting of the Asian-Pacific Central Securities Depositories Group (ACG).

The first panel discussion focused on “A New Era in Strengthening Securities Market Connectivity for economic growth”. According to the KASE head, the Kazakhstan stock exchange actively collaborates with exchanges both within the region and internationally.

“We are actively engaging with Central Asian countries and are a member of the regional association of exchanges. For instance, Uzbek companies are raising funds through our exchange. We also have connections with Middle Eastern and neighboring markets. Our country has significant economic ties with China, and representatives from the Hong Kong and Shenzhen exchanges are present at the conference” she said.

She noted that the high level of capitalization in the Kazakhstan bond market attracts both local and international investors.

“Nowadays many export-oriented companies in Kazakhstan are issuing Eurobonds and local bonds, meaning they are listed on both national and international markets. It is important for us to represent Kazakhstan on the global stage, promote investment in government securities, work together with the National Bank of Kazakhstan, stimulate trading on secondary markets, and collaborate closely with Clearstream and Euroclear, as well as all participants in our infrastructure” Alina Aldambergen added.

Bernard Ferran, Chief Commercial Officer at Euroclear, commented on the growth in Asia and how important Asia and Central Asia are for Euroclear overall. According to him, the region has begun to see significantly more intra-Asian flows, which will require the creation of new market connections. This, in turn, will facilitate access for foreign investors to these new frontier and emerging markets. He also noted that innovation and the implementation of new technologies will be at the forefront of how central securities depositories should conduct their business and ensure compliance with international standards.

The panel session also highlighted the importance of cooperation among regional securities market infrastructures regarding settlement issues, particularly in light of the shift to T+1 trading cycles by major global exchanges, including those in India, China, the USA, and others. This regime means that trade settlements occur on the next trading day. KASE is currently considering the possibility of such a transition by studying international practices.

The representative of Depository Trust & Clearing Corporation, Nellie Dagdag, discussed the lessons learned from implementing the T+1 system. In response to the moderator’s question about the challenges faced by non-U.S. companies during the T+1 transition, she noted that the shift to T+1 in the U.S. in May of this year initiated a new settlement cycle. Nothing extraordinary occurred; there was extensive preparation for the launch of the T+1 system. Apart from the loss of one day for foreign investors, there were no significant changes to the settlement scheme.

In general, she shared about several lessons of the introduction of T+1. The need for cooperation, including with the regulator, discussing all important issues with market participants, including investors is the priority. The speaker also emphasized the importance of regional coordination of efforts for the benefit of investors, issuers, financial companies and other stakeholders.

Olivier Gueris, Chief Operating Officer in AIFC, in his speech expressed the opinion that it is necessary to be flexible when switching to a new settlement system.                                                                                                “There are many different operating models, jurisdictions, some work under common law, etc. You need to be flexible and adapt to different models,” he said.

Speaking on the importance of international cooperation, the speaker provided practical examples of how to adapt to the functional limitations of some markets and utilize new business methods for the benefit of investors. At the same time, she highlighted examples from Hong Kong and Shanghai, where, for instance, members of one exchange can trade stocks listed on another exchange. Overall, cooperation with other exchanges opens up new opportunities for investors, concluded the expert.

From September 9-12, 2024, for the first time in history, Kazakhstan hosted the 26th Annual General Meeting of the Asia-Pacific Central Securities Depository Group (ACG). The organizer was the Kazakhstan Central Securities Depository (KCSD).

Digital technologies are changing the concept of companies’ operations and interaction with clients. However, their use creates certain risks that financial market participants are already considering today. This opinion was reached during the panel session “Digital Transformation and Improving the Quality of Services in the Securities Market” at the 26th Annual General Meeting of the Asian-Pacific Central Securities Depositories Group (ACG).

Digitalization not only changes work of financial market participants, but also supports demand for financial services. In Indonesia, during the pandemic and active implementation of digital solutions, the number of investors has significantly increased, – Samsul Hidayat, President of PT. Kustodian Sentral Efek Indonesia, said during the event.

“During the pandemic, many investors registered on our exchange, their number reached 13.3 million in our central depository,” he added.

The Indonesian Stock Exchange index has doubled over the past 10 years and reached 7,700 points. Today, the Indonesian stock exchange records about 200 thousand transactions daily. Total number of issuers on the exchange amounts to 9037 companies.

Capitalization of the Indonesian stock market is estimated at $ 700 billion. At the same time, the Indonesian capital market is considered one of the most developed in Southeast Asia.

Taiwan Depository & Clearing Corporation (TDCC) also decided to improve customer service through digitalization. Julie Wang, Senior Vice President of Corporate Strategy and Public Affairs at TDCC, explained that the platform introduced new financial technologies in its activities back in 2009. 

TDCC also uses artificial intelligence, for instance, for translation, coding, encryption and other solutions. However, she noted, not every task is suitable for artificial intelligence. For example, highly confidential information should not be provided to AI. In addition, AI does not work very effectively with restricted data. But since TDCC works mainly with accurate data, AI can be used to predict and aggregate it. At the same time, Kazakhstan not only keeps up with global trends in technology, but even surpasses them, says Mikhail Novoselov, Executive Advisor at Freedom Finance.

“Our GovTech and RegTech technologies are not just the most advanced in the world, but exceed the highest standards. For example, we have a biometric database of all residents, and, in fact, you can open a bank account or board a plane simply by scanning your face and providing only your document number. All checks are carried out quickly and invisibly,” – said Mikhail Novoselov. He added that today it takes just a few minutes to open an account, although previously this operation took 15 minutes. But, he agrees, the use of digital technologies creates certain risks, whereby it is necessary to conduct many checks on the client, taking into account sanctions and other risks.

With the development of digital solutions, an important emphasis is also given to regulation. According to Jim Micklethwaite, Director and Head of Operations at Thomas Murray, regulation emphasizes that all organizations take into account all risks, conduct internal training, testing and report on all issues. He also noted that some unstable systems can be moved to the cloud to ensure their security.

“These technologies are inexpensive, and you get more benefits. Many countries have implemented regulations on securities and on key and personal data storage. Another trend is post-Covid. Working from home is becoming normal, although previously there was a wary attitude towards the issue, because people are accessing important systems from home. But now it is becoming the norm,” – Jim Micklethwaite added.

Reference:

ACG is an association of central securities depositories in the Asia-Pacific region, established in 1997. Its main objective is to cooperate across various sectors to improve efficiency in the clearing and settlement field.