GCSD Has Renewed Its Informational System

24/12/2018

Georgia has launched a centralized system for securities settlement - GSSS. The new system will offer a comprehensive set of highest quality services to both domestic and international participants. From now on securities transactions with Georgian securities will become faster, cheaper, more convenient and highly secure.

The work on a new system has started in 2016, as a large scale joint project of NBG and GCSD, private depository owned by Tbilisi stock exchange, important reform to reshape Georgian capital market landscape. It proved to be a prominent example of a successful official and private sector partnership.

The new System allows for riskless, fast and safe settlement of securities transactions. It offers automated solution for nearly all operations, including issue, secondary market transactions, pledges and Repos, corporate actions and redemptions. Process automation requires less time and manual intervention, thus reducing the cost, duly reflected in lower service fees.

The new System is operated by the Central Bank and hosted on its IT infrastructure. NBG ensures its continuous uninterrupted operation and security. Cash leg settlement is done in another system operated by NBG - RTGS. This allows under integrated model, for DvP settlement for all securities transactions in central bank money, using Banks' RTGS accounts at NBG.

GSSS systems packs a bunch of innovative features. It includes efficient tools for liquidity management, partial settlements, net settlement using optimization algorithms, autocollaterilaziton and intraday loan mechanisms, to name a few.

The new System will be used by brokerage companies, alongside commercial banks. For brokerages it opens up whole new opportunities. GSSS will be interfaced with trading platforms, both Exchange and OTC (Bloomberg). This ensures full STP automation for entire lifecycle of securities trades. With same day settlement, time from trade till settlement completion may take a few minutes only.

With the launch of a new System, existing rules and procedures will undergo significant changes as well. Securities held by investors will be kept in more secure environment than before. Selling, pledging or Repoing out securities, in case of liquidity needs, will become even simpler and more convenient. This should increase attractiveness of Georgian financial markets for domestic and foreign investors alike.