The second session of the Arab Federation of Exchanges conference discussed the necessity of moving towards digitizing the depository processes of securities, as well as providing greater security for deposit operations to avoid risks, as well as the necessity of regional links with CDS.
Al-Tabataei: Increased technology investment led to the upgrade of “Kuwait Market” to MSCIKhaldoun Al Tabtaei, head of the Kuwait Clearing Company, said that his company is one of the oldest Arab companies in the field of clearing and depositing securities, pointing out that Kuwait adopts a policy of digital transformation in the clearing and securities depository operations.
He explained that the trend towards depositing securities in the Canadian system is an important factor to avoid risks, pointing out that the best strategy that can be followed is “risk regulation” and this must be taken into account when using technology.
He stressed that developing the Arab markets in accordance with international requirements is essential, and many of our region’s markets have gone into development over the past period, pointing out that international investors have been listened to and implementation steps have begun on the ground.
He stressed that the Arab markets are witnessing tremendous cooperation between the regulatory authorities, the private sector and the CSD, which was very quick to respond, explaining that this is what helped Kuwait to promote and join the MSCI emerging markets index.
Al-Tabtabae pointed out that the Kuwait market experience confirms that those who invest in technology early will win early, pointing out that Kuwait has increased its investments in market technology over the past 3 years.
He added that developing the technological infrastructure for markets and clearing is an approach adopted by most emerging markets, especially to secure deposit operations and achieve best practices and international standards.
In the past, he added, the capabilities of those markets were limited in the area of custodians, but now the work structures are becoming more clear.
Dickinson: Emerging markets need to focus on creating strong investment messages to attract investors
Scott Dickinson, Regional Head of Financial Services and Securities at Standard Chartered Bank, believes that the past period has indeed witnessed great changes, especially in the Middle East, in the field of digitizing the deposit and entry of securities.
He explained that the response to the question about whether custodians around the world are competing or integrating, stressed that partnership in this field, especially with emerging markets, is an urgent necessity for these markets to transfer studied and proven technological experiences to avoid risks.
He explained that emerging markets have not been able to fully exploit new technologies such as “blockchain” and DLT, but they have succeeded in attempts to implement cybersecurity through international partnerships.
Regarding emerging markets’ preoccupation with attracting investors, Dickinson emphasized that historically, the strong investment message and expected good returns find a way to always reach investors, as the most important of all attempts to attract is to focus on the investment message directed to these investors.
He explained that the trend towards implementing CDS in emerging markets gives them more sustainability and gives more maturity to the markets, which gives them more weight in front of investors.
He stressed that they always look at emerging markets in a transparent way to eventually form wider partnerships, explaining that the participations that took place over the past period cannot be overlooked.
Lundial: We expect the conventional systems in emerging markets to end within 5 years
Andreas Lundell, Director of CDS Solutions at Nasdaq Dubai, said that there is always a classification of “those who invest in multiple asset classes in multi-metric markets in the Middle East.”
In his opinion, digitization in emerging markets will not be completed optimally in the next two years in emerging markets, but it needs more time, up to at least 5 years.
On the sidelines of the Arab Federation of Stock Exchanges conference, Lundial stressed that the obstacle of signatures must be overcome by attendance, and the traditional systems of keeping and depositing securities.
Kollek: Implementing securities depository risk governance allows for the existence of different types of currencies
Anna Kollek, Secretary General of the European Central Depository Union, explained that there is great pressure on the Canadian Securities Depository Organization to cooperate with the rest of the organizations in this aspect, pointing out that this will end competition and become a step in the way of cooperation.
She emphasized that partnerships between organizations in this aspect would be useful in acquiring knowledge of all financial markets, stressing that this is important worldwide and not only for emerging markets.
She indicated that the governance rules must be considered in the aspect of risk management, as well as looking at the area of operational risk to reduce it continuously, stressing that reducing risks allows the entry of different types of currencies.
The article “Arab Stock Exchanges” discussing the digitization of securities deposit and listing processes was written in the Stock Exchange newspaper.