Financial market infrastructure


Market participants are conventionally divided into two levels.

The first level consists of those who make decisions on transactions in financial markets. This issuers, investors, financial intermediaries and independent intermediaries (brokers and dealers).

The second level (the infrastructure of the market) - the ones that perform functions related to the implementation of decisions taken at the first level, ensuring the registration, payment, accounting, human security holders, holding agency operations on calculation and payment of income.

Financial market infrastructure include exchanges, registrars, depositories, nominees, trading and settlement systems.

Recorders - are organizations that, under an agreement with the issuer shall keep a register of holders of registered securities involved in the collection, fixation, processing, storing information concerning the securities of such issuers and holders. The main task of the registrar - on demand provide the issuer's register. Registrar conducts its business in accordance with section 1 of the Regulation on the procedure of registers of registered securities, the Securities Commission approved April 1, 1996 № 58.

In addition to the basic functions of the registrar may perform additional functions responsible for issuing up and control the treatment of securities certificates to issue a certificate to the new owner to make lock securities associated with the arrest, office and other operations; transmit information messages to investors.

Issuer may conduct the register of holders of registered securities of their own, if the number of owners of securities does not exceed 500, and if the owners of more than 500, the issuer is required to transfer the right of the register of its registered securities of an independent registrar, under the law.

Depository - are legal persons who, according to the Law of Ukraine "On State Regulation of Securities Market in Ukraine" carrying out activities related to the provision of services in relation to storage of securities and / or recognition of the rights of ownership of securities, servicing securities transactions.

Depository activities can make investment institutions (other than investment funds), stock exchanges (in the world), and specialized depository.

A person using the services of depository called depositor. Between the depositor and the depositary is placed a special agreement (the agreement account "depot"), which regulates relations concerning depository activities. Due to the "depot" - a set of entries in the accounting records depository, taking into account the rights to securities and transactions in their movement from one owner to another.

In addition to storing the securities depository shall:

• arrange for the exchange of information between the issuer and the depositor

• receives income from securities;

• Verification of securities on the authenticity and validity;

• collects and transports securities;

• registers the securities transaction.

Trading system - a system that creates the conditions of the purchase and sale of securities, created by one of the investors or stock exchange, by prior agreement with the National Bank of Ukraine.

Stock Exchange - an organization which seeks to concentrate the supply and demand of securities and facilitating their exchange rate is not allowed to trade on their behalf.

Trading system includes software bidding, mechanism quotation of securities market participants subscriber location with a computer network, and other support facilities.

Contract of sale of securities on the stock exchange is performed during the trading session, but the satisfaction of applications is in the form of transactions of purchase and sale by brokers and dealers in the sales area the relevant stock exchange. With trading system registered transactions fall within the settlement system.

Accounting system - a system designed to create the conditions necessary for a clear and operational organization of cash payments between market participants. Settlement system exists as closed joint stock company, has a license to engage in the NBU settlement operations can maintain one or several stock exchanges. Members of the payment system are the big banks and financial companies, and the reason for the settlement money orders are being prepared after the trading system of the trading session on the relevant stock exchange.

Concluding the description of the financial market infrastructure, it should be emphasized that it is composed of registrars, depositories, trading and clearing systems. Special place in the stock market infrastructure operations play the stock and futures exchanges. In Ukraine, the infrastructure of these institutions may be one of the main functions - provide meet buyers and sellers of securities, and organize the process of trade and payments, perform control functions to guarantee the transaction.