1 MKK CSD of Turkey ACSDA Meeting

Report
MKK - MERKEZI KAYIT KURULUSU
GENERAL INFORMATION
 Central Securities Depository of Turkish Capital Markets for dematerialized
securities

Turkish capital markets is fully dematerialized

Beneficial-owner based system with the opportunity of having «omnibus accounts» for foreign
CSDs & ICSDs
 Supervised & Regulated by the Capital Markets Board of Turkey (CMB)
 Officially Licensed R&D Center

In-house developed depository sytem; «Central Dematerialized System»

In-house developed Inverstor Services ; «e-MKK Services»
 Financial Accounts Center of Turkey

All accounts that are opened in the financial system

System integration with «Ministry of Internal Affairs» & «Ministry of Finance»
 Direct Link with the Austrian CSD – OeKB
2
DEMATERIALIZATION PROCESS
SECURITY TYPE
DATE
DEMATERIALIZATION
RATE(%)
Stocks
2005-2007
%100
Mutual Funds
2005-2006
%100
Exchange Traded Funds
2005
%100
Private Sector Bonds
2006
%100
2009
%100
2010
%100
2011
% 100
Government Bonds & T-Bills
2012
% 100
Certificates
2012
% 100
Sukuks
2012
% 100
Private Sector Commercial Papers
and Bank Bills
Warrants
Asset Covered Securities / Asset Backed
Securities
MKK - SHAREHOLDERS & BOARD STRUCTURE
SHAREHOLDERS
% 64.9
% 30.1
%5
The Association of Capital
Market Intermediary
Institutions of Turkey
BOARD STRUCTURE
2 Members
1 Member
1 Member
3 Members
1 Member
1 Member
MAIN DUTIES AND RESPONSIBILITIES
 Central Securities Depository of Dematerialized Capital Market Instruments
(November.2005)
 Financial Accounts Center for all the accounts opened in Turkish Financial Sector
(October.2011)
 Electronic General Meeting Center for all Borsa Istanbul listed Companies
(August.2012)
 Electronic Commodity Center for all e-Warehouse Receipts (December.2012)
 Digital Company Center for Companies’ «Information Society Services»
(October.2013)
 R&D Center for its Software Development Technologies (November.2013)
5
DEMATERIALIZED SYSTEM SOFTWARE
 Developed by MKK R&D Center, e-signature usage
 Web Based – Java Application – Remote Access
 Secure messaging infrastructure MOM (Message-OrientedMiddleware)
 ISO 27001 Information Security Certification
 ISO 22301 Business Continuity Management System Certification
 Award of merit at the 7th Technology Conference by

TUBITAK (Scientific and Technological Research Council of Turkey)

TTGV (Technology Development Foundation of Turkey)

TUSIAD (Turkish Industrialists’ and Businessmen’s Association)
 TUBITAK R&D support
R&D
SUPPORT
6
CENTRAL SECURITIES DEPOSITORY
ACCOUNT STRUCTURE
MKK
PARTICIPANTS
ACCOUNTS
PARTICIPANT «A»
PARTICIPANT «B»
(INTERMEDIARY INST.)
( (I)CSD )
Participant
Portfolio Acc.
Investor Acc.(1)
(I)CSD Portfolio
Acc.
«Omnibus»
Account
(I)CSD Investor Acc.
(Beneficial Owner)
Free
Free
Pledge
Pledge
Attachment
Attachment
SUB-ACCOUNTS
7
ELECTRONIC ACCOUNT OPENING
APPLICATION FOR
ACCOUNT OPENING

All accounts opened in Turkish Financial Markets

ID and contact information of every Investor in Turkey
INTEGRATION
MKK MEMBER AND
ACCOUNT STRUCTURE
MINISTRY OF
FINANCE
(phone numbers, e-mail and mail addresses of investors)
Legal
Entity
ISSUER
COMPANY
TAX ID NO
INVESTORS
T.R. ID NO
Real
Person
TAX ID NO
ISSUER
COMPANY
INVESTOR
ACCOUNTS
MKK
Central
Dematerialized
System
INTERMEDIARY
INSTITUTION/BANK
INTERMEDIARY
INSTITUTION/BANK
INVESTOR
ACCOUNTS
T.R. ID NO
REGISTRY NO & PASSWORD
MINISTRY OF
INTERNAL
AFFAIRS
Investors
e-Government
Integration
Accounts
8
ACCOUNTS OPENED
(2012 vs 2013)
YEAR
NUMBER OF
ACCOUNTS
OPENED
NUMBER OF FOREIGN
INVESTORS’
ACCOUNTS OPENED
FOREIGN
OWNERSHIP
(%)
2012
4,431,409
19,208
0,433%
2013
3,214,464
19,861
0,618%
In 2013, 42% increase in the number of depository accounts opened by the
foreign investors compared to 2012
FIGURES (February 2014)
ASSETS UNDER CUSTODY
(MARKET VALUE)
NUMBER OF INVESTORS
INVESTOR ACCOUNTS WITH
A BALANCE
• 333 BILLION USD
• 23,188,568
• 3,609,422
NUMBER OF ACCOUNTS
• 43,376,355
NUMBER OF ACCOUNTS
WITH A BALANCE
• 4,278,759
10
Foreign
Ownership:
% 61.23
CUSTODY-SECURITIES
(February 2014)
STOCKS
GOVERNMENT
DEBT SECURITIES
MUTUAL FUNDS
CORPORATE
BONDS
EXCHANGE
TRADED FUNDS
STRUCTURED
PRODUCTS
OTHER SECURITIES
Free Float:
84 bil. US $
Non Free Float:
136 bil. US $
• 1,115,151 INVESTORS
• 220 BILLION US $
• 36,594 INVESTORS
• 81 BILLION US $
•
•
•
•
•
•
•
•
•
•
2,746,347 INVESTORS
13 BILLION US $
173,735 INVESTORS
16 BILLION US $
3,676 INVESTORS
93 MILLION US $
3,216 INVESTORS
4.07 MILLION US $
2,717 INVESTORS
1.594 BILLION US $
11
MKK - Investor Services
AloMKK
(444 0 655)
e-GEM :
Electronic General Meeting
IVR System/ Call Center
Participation to General Assembly meetings by remote access &
mobile applications - voting by electronic means
e-DATA :
Capital Markets Data Bank
Distribution of capital markets data by econometric models
RISE (Investor Risk Appetite Index)
e-GOVERNANCE :
Corporate Governance & Investor Relations
Communication bridge between companies and shareholders
e-CAS :
Investor Notification
Mobile
Services SMS
Mobile Blockage
 Information
 Portfolio Status
 Account
Movements
 Reports
 Investor Blockages
Conversion of agricultural products to electronic warehouse
receipts
Electronic Report Posting System
 Periodic Notification
 Portfolio Status
 Account Movements
Random
Notifications
Real time notification of investors regarding the movements in
their accounts
e-WAREHOUSE RECEIPT :
Electronic Warehouse Receipt Center
Electronic Reports
(e-mail)
Electronic Notification
(SMS & e-mail)
 Instant Notifications
 Account Movements
 Information on
Corporate Actions
Random Report Delivery
 Monthly 10,000 Investors
 Portfolio Status
12
 Mobile Corporate Governance Project which is a platform to enhance
corporate governance and investor relations and develop transparency and
information access for market participants
 Communication bridge between companies and shareholders
 Continuous information exchange between shareholders and companies
through internet, e-mail and mobile applications
 Enables companies to reach their shareholders directly
 Enables shareholders to access information on companies easily and
completely
 Investor Information Center
 TUBITAK R&D support
R&D
SUPPORT
13

«One of the pioneering applications in scope»

Developed in-house, launched and operated by MKK (Central Securities Depository of
Turkey), e-GEM is a multilingual, real-time online general meeting, e-voting and e-proxy
platform.

The platfrom can be easily customized based on different requirements of any financial markets.

With its launch on 01 October 2012, issuers/companies started to use e-GEM for conducting
online general meetings as per the requirement of the Capital Markets Board of Turkey.

Turkey is the first country to make it a legal obligation for Borsa Istanbul listed companies to
enable electronic means for their shareholders to attend general meetings via e-GEM.

It is possible for non-listed companies to use e-GEM as well.
Development
Started
Nov 2011
Development
Finished
Jul 2012
Load Tests
Jul-Aug 2012
Pen. Tests
Sept. 2012
Launched
Oct. 2012
14
What Kind of Operations are Carried Out on e-GEM;

Issuers make convocations on e-GEM and 
upload proxy materials to the system.
Issuers can easily prepare list of attendees
on e-GEM.

All parties are notified when convocation is 
made on e-GEM.

Access to proxy materials
meeting documents.
Participants can ask questions, express
opinions and vote online during the
meeting.
including

Proxy assignment and delivery of voting
instructions without any PoA documents.

Pre-registration of the vote preferences.

Live stream of general meetings.

Physical and electronic votes are
aggregated on e-GEM and calculated by
the system to give the exact result for each
agenda item.

Access to voting results as soon as the
meeting finishes.
15
What e-GEM Brings to
Investors;
 Minimum Costs
(operations & time)
 General Meeting
Process from A to Z
 Vote Recording
 Attendance to
Concurrent Meetings
 Access to Proxy
Materials
 Instant Notifications
 No Record Date
 Partial & Split Voting
(through intermediary)
 No Shares Blockage
 Paperless Proxy
 Vote Instructions
What e-GEM Brings to
Custodians;
 Minimum
Operational and
Out of Pocket Costs

Instant Reporting

No Record Date
 Vote Recording

No More Blocking
of Shares

Integration with
SWIFT

e-Attendance
 Paperless Proxy
 Attendance to
Concurrent
Meetings
 Live Stream of Meeting
16
STATISTICS (Oct’12-2013)
Total Number of General Meetings Held on e-GEM
423
Average Length of General Meetings
43 minutes
Total Number of Electronic Attendees
13,464
Total Number of Physical Attendees
6,196
Number of (Investors’) Nationalities Using e-GEM
41
Maximum Number of Electronic Attendance
756
Maximum Number of Meetings Held on the Same Day
32
Average Voting Period on e-GEM
YEAR
MEETING ATTENDANCE
(FOREIGN INVESTORS)
2011
4,753
2012
6,036
2013
15,115
10 seconds
 13,464 investors attended electronically, 6,196 investors attended physically (19,660).
 In its first year attendance ratio increased by 124%.
 Among 13,464 investors electronically attended, 13,265 are foreign investors
 Among 6,196 investors physically attended, 1,850 are foreign investors
 Average number of physical attendees per GM is 13.
 Average number of electronic attendees is 34 per GM
17
Public Disclosure Platform (PDP): PDP is the primary official source of information for Borsa Istanbul (listed)
companies, who are required to publicly disclose; their financial statements, any material events (events that give
rise to Insider Information and Continuous Information), other events (Monthly notifications, Net asset value
statements, Articles of Association, Fund Charter, Prospectus, circular, Notifications regarding the mergers,
acquisitions and divestures, General information form of the company, Tender offer information form).
GENERAL INFORMATION & STATISTICS
Platform Operational Hours
7/24
Number of Data Vendors Linked to Platform
16
Number of Sub-Vendors Linked to Platform
17
Number of Companies Covered by the Platform
550
Number of Platform Users
2500
Number of PDP Members
1,453
Number of Notifications Sent in 2013
72,100
18
 Notification of Investors via SMS & e-mail on the movements that take
place from out of their accounts
 Activates whenever a transaction on their accounts is made
 Real time notification of investors on the movements that take place
possible errors and fraudulent attempts that take place on their accounts.
 Decreases possible individual or systemic risks


Notification Phase: Notification is made after the transaction is completed.
Blocking Phase: Transaction is not completed unless the investor subscribes to
e-CAS Service.
19
 Adapting the dematerialized system to agricultural industry of Turkey
and Turkic Republics
 Integration of agricultural sector with capital markets
 Conversion of agricultural products stored in licensed warehouses to
electronic warehouse receipts
 Safekeeping of electronic warehouse receipts in MKK’s electronic
book-keeping system
 Trading of products at the Commodity Exchange
 Farmers Notification System
20
 Central data bank of the capital markets
 Co-operation with Ozyegin University & Markit Partners
 Distribution of all data produced in the Turkish capital markets by econometric models in a
secure, consistent and reliable manner
 Statistics on capital markets in international standards
 Academic articles and research reports
 Investor Confidence Index, Investor Risk Appetite Index, Attachment Index and Financial
Indicators
 Electronic securities database
 Contributing to academic research and decision-making processes of policy makers
 Providing reliable & consistent data to ratings institutions
MKK is awarded with the “Best Big Data Project in Financial Sector” award by the International
Data Corporation (IDC)
21

A weekly indicator, analyzing 850,000 investor data

Calculated by taking weekly portfolio changes of the investors who own at least 5,000 TL stock portfolio
value at any period beginning from 28 November 2005.

Changes of the investors’ stock and A-type mutual funds total portfolio values on every Friday adjusted for
the changes in BIST-100 are used

RISE index covers all investor types, such as “Domestic &/ or Foreign Investors” and etc.

Using a matrix of variations, investors are given scores between “0” and “1”

If the calculated index is above (50), it implies that the investors are holding a rather risky portfolio;

If the calculated index is below (50), then it implies that the investors are holding a rather risk-free portfolio compared to
previous period of 2 weeks;
22
MKK – 2014 TARGETS
 Central Depository System Upgrade v2.0 (CDS v2.0)
 Establishing new Collaboration and Cooperation Models with Foreign CSDs and ICSDs
 Upgrading and Updating of MKK’s Information Technologies Infrastructure
 e-GEM SWIFT Integration for both ISO 15022/20022
 Taking Over Borsa Istanbul’s «Public Disclosure Platform – PDP» and Upgrading it to v4.0
(MKK has taken over the platform as of March 17th)
 Providing Support and Maintenance of Systems for Borsa Istanbul – Nasdaq OMX
Partnership
 Dematerialising new Agricultural Products under the Scope of e-WAREHOUSE RECEIPT
Services Provided by MKK
23
MKK - FUTURE OUTLOOK
 Maximizing Ancillery Service & Value Added Service Revenues (50%)
 Data/Information Vendoring
 Financial Information Services
 Investor Services
 Commodity & Capital Market Integration
 Innovative IT Services & Software Development
 New Value Added Services to utilize information capacity
 Implementation of international industry standards (Full STP in Corporate Actions
Operations, ISO20022, LEI, etc.)
 Integration,Cooperation and Partnerships with Europe, Middle East, North Africa and Turkic
Republics counterparties to complete the post-trading chain from West to East
24
25

similar documents