The Trinidad and Tobago Central Depository

Q: Why is the TTCD necessary?
A:

The settlement of transactions  through the delivery of a security certificate has the potential for  errors. For example, a certificate may be invalid, damaged, destroyed  or lost. Experience has shown that when activity on the Exchange  increases, these problems also increase.

 

The TTCD allows investors to deposit  their shares represented by physical certificates through a stockbroker  for safe keeping. The deposited securities are recorded in an account  opened by the stockbroker in the name of the investor. These shares are  registered in the name of the TTCD and held on behalf of investors, so  the investors maintain all their entitlements. Investors will receive  periodic statements from their stockbroker and quarterly statements  from the TTCD which reflect the shares owned as well as any  transactions such as purchases, sales, deposits and pledges executed  during the quarter.

 

Apart from safekeeping, the  depositing of certificates at the TTCD improves the efficiency of the  settlement of transactions. When a stockbroker sells shares on the  Exchange, the TTCD will record the sale by reducing the balance of  shares held in the seller's account by the number of shares sold and by  simultaneously increasing the balance of shares held in the buyer's  account by the same amount. The implementation of the TTCD will allow  for the reduction in the settlement cycle for transactions executed on  the Exchange.

   
Q: What is the Settlement Cycle?
A: This refers to the period of time  specified for the settlement of transactions between member firms. When  the Exchange began operations in October 1981 the settlement cycle was  T+10 which meant that all transactions were settled 10 business days  after the trade date. The settlement period was initially reduced from  T+10 to T+5 and is currently T+3. On settlement day, legal ownership is  automatically transferred from the seller to the buyer
   
Q: Why was the Settlement Cycle reduced?
A: After the worldwide capital market  collapsed in 1987, regulators worldwide decided that, there was need  for stronger measures to reduce risk and promote safety and soundness  in the securities market. As a result, the Group of Thirty (30) nations  spearheaded a movement to standardize operating procedures and regimes  of clearing and settlement systems in capital markets through the  establishment of Central Securities Depositories. Accordingly, the  Group stated that an effective way to reduce risk was to reduce the  settlement period for securities’ transactions. It is imperative that  the TTCD meet international standards, which would motivate foreign  shareholders to participate in our local market, and at the same time  ensure that we do everything to improve safety. We therefore support  the international standard of T+3 for settlement of trades..
   
Q: What are the benefits associated with the implementation of the TTCD?
A:

Efficiency Gains
The use of the automated book entry  system for the transfer of securities eliminates manual errors and  allows for the reduction in the settlement cycle from T+10 to T+3.  

 

Safe-keeping of Certificates
Certificates kept at home or  elsewhere are always in danger of being defaced, misplaced, lost, or  destroyed. If an investor experiences this misfortune, a duplicate  certificate would have to be requested from the company's registrar or  transfer agent which takes approximately 3-4 weeks. However, all  securities which are deposited with the TTCD are kept in the vaults of  the Central Bank of Trinidad and Tobago.

 

Convenience in disposing of securities
If an investor wishes to sell part or  all their securities deposited at the TTCD, there will be no need for  the physical delivery of certificates. The investor can simply place an  order with their stockbroker for execution.

 

Attraction of foreign investment
Foreign institutional investors were  always interested in investing in our market, but were reluctant to do  so because of the absence of a Central Depository in Trinidad and  Tobago. Now we can expect foreign investors to invest in our market,  which will certainly help the Exchange and the economy.

   
Q: What transactions does the TTCD facilitate?
A:

Deposits
Certificates deposited via a stockbroker are recorded as an electronic entry in a TTCD account.

 

Withdrawals
Shares are removed from the TTCD and a certificate is issued by the registrar of the listed Company.

 

Inter/Intra Member Movements
Movement of shares from one account  to another with the same stockbroker or from an account with one  stockbroker to an account with another stockbroker.

 

Pledges
The offering of shares as collateral via the TTCD to financial institutions for credit/loan facilities.

 

Cross Border transfers
Shares can be transferred between the  Depositories in Trinidad, Jamaica, Barbados or the Eastern Caribbean  for trading or safe-keeping purposes.

 

Corporate Actions
Entitlements for shares lodged with the TTCD are distributed to investors. e.g. Dividends, Bonus and Rights Issues.

   
Q: What do I need to open a TTCD account?
A:

To open an account with the TTCD  an investor will need two valid forms of identification and must sign a  client agreement form with the stockbroker.   

   
Q: How does the trading system and the settlement system work together?
A:

An order can only be executed if the shares are available in the settlement system. Shares will not be  available for trading if they are pledged.

   
Q: What is the TTCD Registration Department?
A:

The TTCD Registration Department  was officially launched in December 2006 and offers transfer agent and  registrar services. The TTCD maintains the register of shareholders,  processes stock transfers and addresses inquiries from shareholders,  brokers and clearing agents.

   
Q: What is the difference between the TTCD and the TTCD Registrar Department?
A:

The TTCD is a computerized book  entry system where physical certificates are lodged via a stockbroker  for sale or safekeeping,  whereas the TTCD Registrar holds the  inventory of physical certificates and manages dividend payments, name  changes, address updates and nominal  transfers for shareholders and  beneficiaries who hold  physical certificates.

   
Q: Which companies does the TTCD act as Registrar for?
A:

Currently the TTCD acts as Registrar for:

 

Agostini's Limited
Angostura Holdings Limited
ANSA McAL Limited
ANSA Merchant Bank Limited
CLICO Investment Fund
Calypso Macro Index Fund
First Citizens Bank Limited
Guardian Holdings Limited
Guardian Media Limited
Massy Holdings Ltd.
National Enterprises Limited
National Flour Mills Limited
One Caribbean Media Limited
Point Lisas Industrial Port Development
Corporation Limited
Prestige Holdings Limited
Republic Financial Holdings Limited
Scotiabank of Trinidad and Tobago
Trinidad and Tobago NGL Limited
Trinidad Cement Limited
The West Indian Tobacco Company Limited
Unilever Caribbean Limited

   
Q: When are TTCD statements generated?
A:

Statements are generated once every quarter:
Should you require an additional  statement you can visit our office with a form of identification and  one will be generated at a cost of $3.00 per sheet. Statements show  activity in the shareholder’s account held under a stockbroker.

   
Q: Where do I get more information about the TTCD?
A:

For more information about the TTCD you can call any stockbroking firm or visit us at:  
The Trinidad and Tobago Central Depository Limited
10th Floor
Nicholas Tower
63-65 Independence Square
Port of Spain.
Telephone: (868) 625-5107-9 / (868) 625-7148
Fax: (868) 623-0089