Representatives of the National Bank of Georgia took part in the World Forum of Central Securities Depositories held in Prague to discuss challenges and strategic development of securities safekeeping and settlement.

Giorgi Laliashvili, Head of the Financial Markets Department, was pleased to share the successful experience of Georgia's securities safekeeping and settlement system reform with the forum participants. The audience was keenly interested in the rapid development of the capital market and private securities and the attraction of international investors. Sharing Georgia’s experience was interesting for countries that have two or more central depositories.

The National Bank of Georgia and the Central Securities Depository of Georgia introduced a unified securities settlement and depository system in 2018. Powered by Montran, an American company, the system centrally serves all types of securities, including public and private bonds and shares. Two independent depositories included in it help maintain high efficiency and low cost of the system.

A major reform was implemented with the introduction of the new system, fundamentally changing daily activities of securities market players, Giorgi Laliashvili explained. The fully automated system made the securities settlement considerably cheaper, affecting depositor rates. Reducing transaction costs is an important incentive for market development and secondary trade.

The system is usually operated by central banks. Securities investors look at their profit and also at how reliably their securities are protected. The Central Bank is the best place in this regard, with its sound IT infrastructure meeting modern-day requirements. Securities deposited in the central bank system are reliably protected thanks to appropriate strategies and procedures for business continuity in place.

The project is a clear example of successful public-private partnership. The teams of the National Bank of Georgia and the Depository of Georgia spent two years dynamically worked together on the design, testing and migration of the system. Joint efforts produced a modern, all-embracing system, providing an invaluable service to the Georgian financial markets, Giorgi Laliashvili noted.

The draft law on dematerialized securities, developed with the help of the IMF experts, is a part of the reform, missioned to further align the securities release, safekeeping, settlement and other related issues with international best practices.

The World Forum of Central Securities Depositories was attended by more than 200 delegates from both advanced financial markets and emerging markets.