Infinity by Maldives Security Depository
Maldives ranks amongst the top 100 countries in ICT development index. Banking on the high adoption rate of Internet, a number of local businesses increase their outreach by creating user friendly IT based services. This report provides an overview of ‘Infinity by Maldives Securities Depository’ – a one stop solution for investors.
IT infrastructure is crucial for capital market service providers. However, both internal and external systems and processes are subject to regulatory approval. Maldives Securities Depository (MSD) is a regulated entity and their rules, procedures and business processes are closely monitored.
This makes it difficult for the exchange to act as ‘creative destruction’; tight regulatory oversight imposes a requirement to continuously seek approval to business processes, at times hindering the fast pace of development envisaged by the market players. The Primary objective of MSD is to serve as the central platform for custody, clearing and settlement of securities. At a time where modern and efficient services are demanded by the customers, business process of MSD is important to any company who raise finance from the public. Since 2014, MSD has continued to focus on streamlining processes to promote efficiency in all types of securities related transactions. According to CEO Mr. Hassan Manik, the concept of MSD as a central hub with complementing ancillary services was coined by his team in 2014. Their philosophy is to provide ‘total solutions’ that will increase the interaction rate with the Maldives Capital Market. In this venture, his team embarked on developing ‘Infinity’.
How to begin
The web service available from https://infinity.depository.mv/ enables both Non-MSD account holders and MSD account holders to subscribe to an offer. In order to kick off the process, all you need is your National Identification card.
You can view the infomercial here: https://youtu.be/yYZTeD9PR_A
Non-MSD account holders
As of today, MSD maintains approximately 26,000 securities accounts. This reflects approximately 6.5% of our population; representing a high percentage compared to other markets.
Subscribing to the current IPO even in the absence of a Securities Account is simple. Investors request to create an MSD account on Infinity and then complete their personal details and upload scanned copy of their identification card to initiate MSD account opening process.
Bank information required to go to the final step of placing your order to buy shares. If the subscription amount exceed MVR 50.000 further KYC information is required to proceed. The final step will require investors to buy shares by placing the order and making payment via payment gateway. The reason for providing your details to open a securities account, along with your share purchase order is to enable issuance of shares in scripless form or dematerialized form. This means, companies will not provide a physical certificate of entitlement, however your entitlement will be evidenced by a statement generated by MSD. Once the MSD account is opened you can activate your Infinity ID and view details of your subscription.
MSD account holders
Subscribing for shares by MSD account holders are much simpler in comparison to Non-MSD account holders. If the applicant’s ID Card Number, email address and contact number is consistent with the information provided to MSD earlier the system will direct you to the subscription page after verifying the details in a secured manner. Applicant is required to activate their infinity ID which directs you to the subscription page. Once the payment is completed, your order will be placed and a confirmation will be issued soon after.
Instilling a savings culture for your children?
Infinity enables purchase of shares on behalf of your children who are minors, below the age of 16. You are required to provide birth certificate or an equivalent document to confirm guardianship prior to subscribing shares for minors. Minors are also required to complete the MSD account opening process, their MSD accounts will be operated by the respective guardian until they reach the age of 16.
Buying shares for someone else?
Yes, Infinity also allows you to buy shares for someone else who have executed a Power of Attorney granting authority to you to initiate and complete the transaction. In this case, first step is to create your MSD account on Infinity, as well as ensure that the person who has issued the Power of Attorney holds an MSD account. A confirmation email will be issued upon opening the MSD account within 3 business days.
As a general rule, all public offers has specific terms and conditions. Investors shall carefully read the terms and conditions of the offer prior to stating their consent. Share allotments are conducted after the closure date of the offer. Once the allotment is complete, investors who subscribed to the offer via infinity will receive a confirmation of share deposit to their respective MSD accounts.
Is this a breakthrough for MSD?
According to Mr. Manik, Infinity is a very small component of his entire plan to provide a total solution for both issuers and investors. He has been very instrumental in conceptualizing, designing and in implementation of Infinity. He is awaiting further regulatory approvals to roll out more features through infinity. In our brief interview, he expressed concerns over the lack of an environment for creativity, especially in the case of over regulated services in the Maldives.
According to him, it is obvious that service providers such as banks, insurance service providers, telecom providers amongst others are ahead of the regulators. He further explained that, this is not only the case in the Maldives; it is also the case elsewhere – therefore regulators need to strike a balance between regulation and development in the best interest of all stakeholders.