23 Jan 2020
With more companies getting listed on the Cambodia Securities Exchange (CSX), there will be more banking institutions joining the securities market by playing their roles in acting as “cash settlement agents”.
These agents settle transactions upon their completion. They involve a seller transferring securities or financial instruments to a buyer and the buyer transferring money to the seller.
Cambodian Public Bank Plc was yesterday officially recognised as a cash settlement agent by the Securities and Exchange Commission of Cambodia (SECC) and the CSX. It will enable the bank to contribute to the development of the securities market.
Sou Socheat, director general of the SECC, said the bank’s recognition as a cash settlement agent in the security market will increase trust, while raising more trading activity in the market.
He noted there are now four banking institutions that have made such a move, including Acleda Bank Plc, Canadia Bank Plc, Bank for Investment and Development of Cambodia Plc and Cambodian Public Bank Plc.
“Cash settlement in the securities market can be done only through the banking system and we now have four banks to play this role,” he said, adding that ABA will be the next because the bank has just sent its proposal to the SECC.
“We will work on reviewing the proposal as soon as possible and if we find no problems we will allow the bank to undertake the role,” he said.
“Once the security sector is thriving with more trading and transactions, it will then encourage the banks to grow together,” he said.
Datuk Phan Ying Tong, regional head of Indo-China operations, Cambodian Public Bank Plc, said he is confident the bank will be able to play an instrumental role in promoting financial inclusion by educating customers about the long-term benefits of investing their money in the capital market.
“I think we can make a positive contribution to the market because banks have been operating here in Cambodia for almost 28 years now. We have a lot of customers – more than 100,000 customers. So I think it is good opportunity for us to engage them into the securities market,” he said.
When asked how the bank would benefit from its new role, he said it would help it to generate more sources of income, acquiring more knowledge about the stock market as the bank trains its staff to participate in the sector. “In fact, dedicated priority counters manned by experienced staff have been set up at all our 31 branches throughout Cambodia to ensure that the cash settlement is carried out efficiently,” he said.
“As a cash settlement agent, Cambodian Public Bank would capitalise on its synergy with Campu Securities Plc in order to promote the securities trading to our customers and to reach out our large customer base through our wide network branches,” he added.
He said the soon-to-be listed commercial banks on the CSX’s main board – including, Acleda Bank and Korean-based Phnom Penh Commercial Bank – will pave the way for interest from local and foreign investors.