GSE to establish electronic clearing and settlement system

Accra, May 29, GNA - The Ghana Stock Exchange is to establish electronic clearing and settlement system to undertake all activities relating to the selling and buying of shares on the exchange. Announcing the decision at the 18th Annual General Meeting of the Exchange in Accra on Thursday, Mr. Frank Adu Jnr., Chairman of the GSE Council, said the move was to allow a seamless flow in the process of buying and selling securities from trading through clearing and settlement to a depository where the securities would be held in electronic form.

He said because the Exchange was putting up a clearing, settlement and depository system, it had become necessary to set up a subsidiary to handle depository services since the Securities and Exchange Commission required a separate company for a depository license. In this direction, the Exchange has set up a wholly owned subsidiary called the GSE Securities Depository Limited. Mr Adu Jnr said when the depository started operations, it would enable the migration of listed securities into it.

The admission of listed securities into the GSE Securities Depository will eliminate the risks associated with excessive paper work in post-trade and processing and registration.

He said when migration of paper share certificates of listed companies into the depository begins, every investor who traded on the Exchange would be required to open an account with the Depository. The Investor accounts would show records of shareholdings (balances, purchases and sales of shares) so that on receipt of regular statements, every shareholder would know all his ownership of listed shares.

Mr Adu Jnr. said the Exchange would focus attention on a number of prospective listings and facilitate primary market offer and subsequent listing before the end of September.

He said the GSE was committed to "demutualization", which involves the conversion of the Exchange from a public company limited by guarantee to a public company limited by shares. The programme will also involve the separation of the commercial functions of the company from the regulatory powers it possessed. The process is to be completed by 2010 and the Exchange is hiring consultants to develop a viable business plan and oversee the process.