In the event that an applicant is unable to meet any of the stipulated requirements, the services of a qualified Participant of the Depository can be utilised as a correspondent.
Participants of the Depository are required to pay two sets of fees: (a) participant and account maintenance fees, and (b) transaction fees.
In addition, fines may also be imposed upon participants for violating the Rules and Procedures of the Depository. Fines are based on the level and frequency of violation.
Participants in the ECCSD must demonstrate that the entity can maintain sufficient liquid capital and make additional payments into a Participant Fund, based on the firm’s trading activity. The higher the trading activity, the greater the risk to the Depository, and the higher the required fund contribution by the participant.
Applicants seeking to become a participant of the Depository must complete an application form and provide copies of the annual audited financial statement and most recent monthly financial statement. Each participant is also required to meet the following legal obligations:
- Provide three copies of a signed Participants Agreement which indicates that the participant agrees to be bound by the Rules of the ECCSD.
- Appoint a clearing bank to effect money settlement and provide three copies of a signed Clearing Bank Agreement. This agreement specifies the conditions the participant, the clearing bank and the Depository will follow relating to settlement activity with the Depository.
- Provide copies of the Resolution of the Board of Directors meeting, showing approval to become a participant of the ECCSD.
An applicant for participation in the ECCSD is not required to be a member of the Exchange. To be considered for participation, the firm must qualify as at least one of the following:
- a licensed broker/dealer or limited service broker in good standing with the ECSE;
- a bank or any subsidiary which is subject to supervision or regulation by the Eastern Caribbean Central Bank;
- a licensed investment company , a closed end mutual fund
- a regulated financial institution, which demonstrates to the Board of Directors of the ECCSD that its business and capabilities are such that it could reasonably expect material benefit from direct access to the Depository’s services.
The Eastern Caribbean Central Securities Depository (ECCSD) holds securities as nominee on behalf of its participants. The Depository moves securities as instructed by participants to support their settlement obligations and other securities related activities.
The Securities Regulatory Commission (ECSRC) may apply caps on the commissions that brokers/dealers and limited service brokers can charge customers.
All intermediaries seeking membership in the Exchange are required to complete an application form prescribed by the Exchange. The legal intermediary’s chief officer must sign the application. The application form must include a description of the applicant’s operational capabilities and the applicant’s written supervisory procedures.
There are five categories of fees that apply to intermediaries. These are licensing fees, examination fees, training fees, membership fees, and transaction fees. The first three categories are collected on behalf of the Securities Commission.
Fines may be levied on intermediary members based on the level and frequency of violations of Exchange rules. All fees and dues are payable on a monthly, quarterly, or annual basis; fines are payable on demand.
Each intermediary member of the ECSE is required upon entry to make a nominal capital investment in the Exchange. This investment constitutes an equity stake in the ECSE.