According to him, Financial Market Infrastructure (FMI) silos of exchange, Clearing House and CSD would continue to grow in the coming years.
Speaking at a lecture as part of the 10 year anniversary celebration of the CSD, Mr. Butterrill noted that the CSD was critical in the country’s economic development as it would attract more investments into the country.
Mr. Butterrill, who spoke on the topic: ‘Depository Services in Ghana: The Next Decade’ noted that the Business Realities including mandated standards and major industry changes were impacting CSDs, CSDs and business volume, and fixed versus variable costs.
He said: “CSDs like other businesses face constant demand for more service (value) at a lower cost thus a change in the business cost model has become essential, particularly for CSDs in developing markets like Ghana”.
CSDs (big & small) around the world are diversifying their businesses to service outside their core offering and to customers, often outside their traditional base, Mr. Butterrill added.
He mentioned entitlement payments using central bank funds, process automation, services for collateral/guaranty management, and corporate action processing as the major CSD core business initiatives.
Touching on Trends and Tendencies, theCSD expert noted that30 years ago FMIs (stock exchanges and CSDs) were typically user own mutualized companies that existed to service their members on a cost recovery basis.
Of the world’s 150 plus CSDs, there are only two (that operate on a not-for-profit basis). A large number of FMIs are now public companies with many that trade as listed companies in stock exchanges. CSDs generally have achievable level of profits than foreign exchanges, according to him.
Mr. Butterrill told the well-attended participants at the lecture over the weekend that principal barriers to horizontal integration were the prospect of reduced competition, loss of control, and loss of market status in the case of cross border integration.
He stated: “Horizontal integration of post trade infrastructure is a critical imperative in some markets to achieve efficiency in gains”, while under Vertical Integration, stock exchanges recognize that they needed to establish clearing and settlement capability to support their exchanges.
A former First Deputy Governor of the Bank of Ghana, Emmanuel Asiedu Mantey, who chaired the lecture, advised the management of the CSD to organize such lectures regularly to deepen education on the depositories.
Meanwhile, as part of the 10 year anniversary celebration, the Chief Executive Officer of the CSD, Stephen Tetteh led the staff to present a cheque of GHc10,000 – a printer and food items to the Accra-based Autism Awareness Care and Training (AACT).
Receiving the cheque and food items, the Founder and CEO of AACT, Serwah Quaynor, thanked the management and staff of the CSD for coming to their aid.
Caption: Chief Executive Officer of the CSD, Stephen Tetteh presenting the cheque and the food items to Mrs Serwah Quaynor
African Eye News.com