The year 1997 can be considered a year of big changes for the Estonian
securities market. Activity on the securities market rose considerably
and the capitalisation of Estonian securities market increased from EEK
13.4 billion to EEK 27.6 billion in the previous year. Total turnover
of securities market in 1997 was EEK 34.15 billion. The number of valid
securities accounts at the year-end was 52 010, while the number of securities
accounts with positive balance was 37 062. The number of commercial undertakings
registering their securities at the Central Securities Register increased
considerably. At the year-end ECDS kept the stock registers for 113 companies,
besides, there were 37 municipal bond issues, 42 corporate bond issues,
10 issues of State Compensation Fund bonds and 43 issues of commercial
papers outstanding at the Central Register.
The total amount of the contracts concluded between issuers and Estonian Central Depository for Securities had increased to 243 by the year-end.
In 1997 the first steps were made towards a common Baltic securities market. In order to simplify the trading procedure for investors who are interested in making investments in the securities of the other Baltic states, on January 31, 1997 an agreement was signed between Estonian Central Depository and Latvian Central Depository. The agreement enables Estonian holders to keep Latvian domestic securities, which are admitted by the LCD to its registry, on their securities accounts at Estonian Central Depository, and vice versa. Starting from the 1st of July 1997 the two depositories started payment-free transfers. The agreement also stipulates the procedure of common primary market functions. At the end of 1997 the first public offering was arranged both in Latvia and in Estonia (public offering of PAS Gutta from 11.12.97 to 24.12.97). The next step will include real-time transfers and delivery versus payments between the depositories.
Also an agreement between EVPKR (Estonian Central Register of Privatisation Vouchers) and ECDS was signed in 1997. The agreement gives EVP’s (Estonian Privatisation Vouchers) the status of dematerialised security which can also be registered at the ECDS. The agreement was concluded in order to allow the trading of EVP’s at the stock exchange.
The event of big importance during the 1997 was the preparation for introducing new software programme Depository 2000. The transition period from Shares programme to Depository 2000 is intended to be the first half of 1998. Starting from the second half of 1998 ECDS will use the new software for all registry entries. Compared to the Shares programme the new software will be more user-friendly and increase the efficiency of work for both the account operators as well as the Estonian Central Depository for Securities.
The number of account operators increased during the previous year to 12, caused by the addition of ERA Pank and Eesti Krediidipank to the list of account operators.
The revenue of the Estonian Central Depository for Securities in 1997 was EEK 10.6 million, which shows a two-fold increase since 1996 (EEK 5.7 million). The revenue comes mainly from transaction fees (EEK 4.2 million), annual payments (EEK 1.6 million), maintenance fee of the accounts of legal persons (EEK 1.5 million) and registration fees (EEK 0.9 million). Investments have been made to fixed assets and software. The total amount of investment was EEK 2.1 million.
Because of the increase in activity of the securities market the number of people employed has increased. During the financial year the number of employees at the Estonian Central Depository for Securities increased by 30%. The salaries calculated during the year totalled EEK 1.5 million, of which EEK 314 000 was made up by the salary of the managing director (who is also in the position of Chairman of the Board).
Martti Kuldma
Chairman of the Management
Board
Estonian Central
Depository for Securities
