CSX introduces USD settlement, increases market accessibility
INVESTORS can now trade their stock on the Cambodia Securities Exchange (CSX) in the local currency, the Khmer riel (KHR), and settle in US dollars (USD). The new initiative is expected to enhance trading activities, according to an industry representative.
CSX announced that the new framework simplifies trading and settlement for investors.
“CSX is pleased to inform investors that we have launched a new trading mechanism that allows trading in KHR and settlement in USD, starting from January 15, 2024,” the CSX stated.
Seng Chan Thoeun, CEO of Royal Group Securities Plc (RGS), expressed optimism about the positive impact of the new plan on the development of the local bourse, offering investors more options for convenient trading and settlement.
“The recent introduction of USD settlement by [CSX] represents a significant development for the Cambodian capital market. It meets investor demands for the option of USD settlement,” he said.
“The step boosts market competitiveness, draws a wider range of investors and aids in the market’s growth. We anticipate that the new USD settlement mechanism will attract more offshore investors, which should contribute to enhanced market liquidity as well,” he added.
The CSX explained that USD settlement is a process where investors can place buy or sell orders in KHR but settle the trades in USD, based on the exchange rate offered by the bourse.
According to the exchange, the rate is determined by the National Bank of Cambodia’s (NBC) rate from the previous working day.
“Investors who are buyers should have a USD cash balance in their trading account and can place orders through brokers or the CSX trade mobile application,” it added.
Sou Socheat, director-general of the Securities and Exchange Regulator of Cambodia (SERC), stated at an event last year that as of December 19, the regulator had licensed and accredited 120 securities companies.
He detailed the list including 13 securities, 16 fund management and eight asset management companies, as well as four financial and two investment advisory firms, five central counterparties, 22 derivatives brokers, three fund managers, three securities distributors and four distributors for selling, repurchasing or repaying companies.
Socheat noted that the regulator has also granted permission and recognition to other companies.
As of December 13, a total of 45,870 investor identification numbers had been issued, as reported by the SERC.