Misr For Central Clearing, Depository & RegistryMisr For Central Clearing, Depository & Registry

Dr. Tarek Abdel BaryManaging Director

Corporate Actions Automation to reduce riskPresentation

AMEDA conferenceAlex., April 27th -29th 2009

Contents

What is Corporate action means Philosophy of introducing the service Objective of Introducing the service Types of the corporate actions

Cash dividends Underwriting- Public offer- Private offer Capital Increase - stock dividend Capital Decrease Privatization Share swap

Managing the corporate actions risk

What is Corporate action means

Any event initiated by a corporation which impacts its shareholders When a publicly-traded company issues a corporate action, it is initiating a process that will bring actual change to its stock .

Corporate actions are typically agreed upon the company's board of directors and authorized by the shareholders.

Some examples are stock splits, dividends, mergers and acquisitions, rights issues

Philosophy of introducing the service MCDR is the sole company in the Egyptian market

that provide the clearing, settlement and Depository services of the Egyptian Public traded securities as well as the consequent re-registration process for that reason MCDR has unique possibilities in delivering corporate action services, as well as assisting shareholders in the exercise of their rights.

MCDR provides a wide range of services relating to issuers' corporate actions and the exercise of shareholder rights.

Objective of Introducing the service

Best suited automated systems to support the variety of corporate action events Cash & Stock Dividend Capital decrease / increase Coupon Payment Stock Merger & Split Automatic allocation of corporate action benefits to

customer accounts based on the real position to obtain their proper rights accurately and on timely manner.

Provide investors with different means to cope with their different needs ( cheques – Bank transfer – swift- ….)

Types of the corporate actions

MCDR represents the issuance company in various corporate actions events which processed through MCDR automated systems:

MCDR Integrated systems

Issuer instruction

Dividends distribution

UnderwritingPublic/

Private offer

Capital increase

Stock dividends

Capital Decrease

PrivatizationShare swap

Cash dividends process

IssuerMCDR/ Aff. And Inf. Dept.

(2) Request of cash dividends

Registry Dept. )4 (Cash Dividends memo

(5) Data entry of

the request

shareholders list in the record date

Memo of Dividends bank acc

(3)

(1)

Issuer general `assemblyDecision

Data entry of

the request

Math and

confirm data

(6)Yes

(7)No

Dividends bank

Accounting Dep.

notification

)8 (Notification with the transfer

)9 (permission

)10 (Posting Coupon department

(5)

Cash dividends process

Coupon department

Outsight dividends banks

(47 branch) covering the sate

cheques SWIFT Bank transfer

ID card

Issuing dividends receipt up to L.E.

50,000

Coupon Dep. Front office

Filling the dividends request

Coupon Dep. Back office

Review & check

Issuing the dividends receipt up

on submitted request

Issuer general assemblyDecision

Securities Accounting Dept. Aff. And Inf. Dept.

(2)

Req

uest

(3) Verification of shareholders data

)4 (Capital increase memo + underwriters CD

A

T

B

T

C

T

Issuer

T

Amendment of issue acc.issue acc.

increase

Issuer (1)

(5)(6)

(7) Credit client acc.

Underwriting/ Public offer /Private offer

Issuer

EGX

Securities Accounting Dept. Aff. And Inf. Dept.

(2) Request of Capital increase

)3 (

No

ti fic

at i o

n o

f i s

sue

r a

dm

i ssi

on

)4 (Capital increase memo

Registry Dept. )4 (Capital increase memo

A

T

B

T

C

T

Issuer

T

)9(

Dis

trib

utio

n

(5) Initiate capital increase

)6(increase issue account

(7) preparing shareholders list in the record date

Issuer general assemblyDecision

Approval of execution

(3)

(1)

8

Capital increase / stock dividend

Issuer

EGX

Sec. Acc. Dept. MCDR-Aff. And Inf. Dept.

(2) Request

)3 (Notification

Execution approval letter

)4 (capital decrease memo

Registry Dept. )5 (capital decrease memo

A

T

B

T

C

T

Issue acc.

T

Cash dividend Dept.)9 (Repatriation Payment

(7) Initiate capital decrease

(8) issue account decrease

(6) preparing shareholders list in the record date

Issuer general assemblyDecision

(3)

(1)

Capital Decrease

Brokers EGX)1 (Give Buying )2 (Register of

Client orders

MCDRClearing Bank

Cre

dit

Se

tt.

Ca

sh A

cco

un

t

Cash Sett.

)6(Compare

orders with

credit cash

order

)4 (

Sen

ding

or

der

)5 (Sending cash balances

Canceling order

yes

Securities sett.

(9)

)7 (

Un

suff

icie

nt c

ash

(3)

No

(8)

(9)

Privatization

(6) Check Balances

Sec.acc.dept

Un sufficient balance

Issuer(1) Request

Aff. And Inf. Dept.

)2 (

Sha

re s

wap

m

emo

)7( No

Brokers EGX

)3 (Give orders

)4 (Register of Client orders

Canceling order

Issuer A

C C C

T T T

Issuer B

C C C

T T T

)5 (Sending order

Share swap sett.

Yes

)8(

Share SWAP

Managing the corporate actions risk

Receipt of Corporate Action information.corporate action request be executed when the issuer submits the necessary authorized documents (Board of Directors or General assembly meeting decision)

Distribution of Corporate Action informationThe issuer should notify the company with all related information accurately and on timely manner . Receipt of Corporate Action InstructionsMCDR maintain a pro active client files for each IssuerMCDR has an efficient system of receiving and processing the issuer instructions information.

Managing the corporate actions risk

Processing of Corporate Action InstructionsAll corporate instructions are processed on timely and accurately way to be able to managing the corporate actions effectively

Clear statement of liabilityMCDR has the responsibly to compensate any client in the event of an error could result from wrong processing. Manual processing of the related data be limited to minimum level to reduce the likelihood of error as well as minimizing the potential losses

Any Question?

Thank you

t.Bary@mcsd.com.eg