CDS Clearing and Depository Services Inc. today announced that it has retained its ‘AA’ rating from Thomas Murray, the specialist custody rating, risk management and research firm.
The rating assesses the risk exposures for investors associated with the processes the depository has in place to facilitate the safekeeping and the clearing and settlement of securities. It considers the capabilities of the depository and the quality and effectiveness of its operational infrastructure. It also assesses the depository’s willingness and ability to protect its participants or clients from losses. As part of the rating, the scope and quality of the depository’s services is assessed.
Simon Thomas, CEO and chief ratings officer of Thomas Murray said, “CDS remains one of the top rated CSDs in the world. The strength of CDS confirms the excellence of Canada’s capital market infrastructure. The rating reflects the confidence the Canadian market has in CDS’s complex and sophisticated risk model which has proved robust during periods of market volatility during the past year”.
CDS says that although the overall rating has remained unchanged, it has made significant progress during the past year in taking steps to mitigate risk and as a result the operational risk component of its rating has been upgraded to ‘AA+’. The developments that have led to the improved rating in operational risk are: an increased level of comfort that the appropriate controls and procedures are in place; upgraded systems; and enhanced business continuity arrangements.
Other efforts to help mitigate risk during the year were: introducing a $50 million limit on the size of debt trades which has lessened the pressure on end of day settlement of large trades to reduce trade settlement failures; the wider use of third party electronic matching utilities, coupled with the introduction of trade matching target times, to reduce the risk of failed trades; and, another profitable year in which further rebates were given to participants and fee reductions were implemented.
CDS retains ‘AA’ rating from Thomas Murray
- By: James Langton
- July 30, 2008 July 30, 2008
- 15:30