RESERVE BANK OF FIJI LAUNCH NEW CENTRAL SECURITIES DEPOSITORY
The Governor of the Reserve Bank, Ariff Ali, yesterday launched a new Central Securities Depository (CSD) for Fiji, following the launch of the newly upgraded Real
Time Gross Settlement (RTGS) System earlier this week. This is a significant turning point for Fiji as we would transition from physical certificates of securities to maintaining records in electronic format.
The implementation of the
CSD and the RTGS systems, under the administration of the Reserve Bank of Fiji
(RBF), was the outcome of around 2 years of close collaboration between the RBF and its development partners particularly, International Finance Corporation a member of the World Bank Group and the system provider that is Montran Corporation, as well as the efforts & commitment of the CSD participants.
The new CSD will provide an electronic registry and safe custody for dematerialised Government and Statutory Corporation securities and together with the RTGS system enable the trading & settlement of securities on a real time basis or Delivery versus Payment basis. Besides these benefits, the CSD was also a requirement for the listing of Fiji’s Sovereign Green Bonds on the London Stock Exchange in 2018. All initial CSD participants have been trained on the use of the system, particularly in their specific roles such as issuers, investors and brokers of securities administered by the RBF.
In launching the CSD, the Governor stated that “leveraging technological innovation to further develop and modernise Fiji’s securities market has been inevitable with the demand for efficiency in the market amidst the growing volume and value of securities transactions.” As at 30 October
2022, the total nominal value of outstanding government and statutory corporation securities in the market stood at $5,958.64 million, which is now housed in the CSD system enabling participants to use automated and online processes. Commenting on the launch, the Minister for Economy, Aiyaz Sayed-Khaiyum, said that “Developing a well-functioning domestic securities market is one of the key objectives of Government’s medium term debt management strategy. The rollout of the CSD significantly improves the financial market infrastructure which will bring about greater efficiencies in market operations and lay the platform for further development of the domestic securities market. Government will continue to work with
RBF and other stakeholders to further develop the market with a specific focus on secondary market development and increased liquidity in the domestic market.”
The existence of a legal framework is key to driving innovation & transformation and this significant market development was enabled with the passing of National Payment System Act (2021) which became effective from 30 September 2022.
The Governor expressed appreciation to the Government, International Finance Corporation, a member of the World Bank Group and the supporting donors for their technical assistance in the reform and stated that the Bank will continue to work closely with the relevant stakeholders on further enhancements.