From November 1 1996, the Ghana Stock Exchange adopted new rules establishing the Securities Clearing and Settlement House (SCSH), which serves as a centralized clearing and settlement facility for stock exchange trades. The SCSH is run on a day-to-day basis by the managing director of the stock exchange. Policy for the SCSH is set by the Stock Exchange Council.
All licensed dealing members of the stock exchange and all registrars of listed securities on the stock exchange must be members of the SCSH. Custodians and other institutions can also be admitted as SCSH members by the Council. Sections 4 to 6 of the new clearing and settlement rules regulate admission to the SCSH, resignation from the SCSH and termination of SCSH membership.
In addition to establishing the SCSH, the new clearing and settlement rules significantly reduce the settlement period for securities transactions on the stock exchange. The rules adopt a T+5 settlement period. Previously, trades on the stock exchange were settled on a T+10 basis.
The new clearing and settlement rules, together with Schedule I, adopted at the same time as the rules, also regulate participation in the clearing and settlement process by representatives of SCSH members, documentation requirements in connection with clearing and settlement and the timing of various aspects of the clearing and settlement process. In addition, the rules lay down penalties for failures to satisfy clearing and settlement obligations.
Michael R Littenberg