Security market operations

Dear Customer

The Bank undertakes the following actions for the purpose of safekeeping of the funds delivered to the Bank within the scope of investment services:

• Your funds (securities) are being kept on the current (securities) account opened with the Bank on your behalf which grants You the opportunity to receive reports on Your current (securities) account balance and other information on implemented operations - in accordance with internal procedures of the Bank.

• The Bank keeps segregated securities account for the Customer:

a) In the Central Bank of Armenia for armenian government securities.

b) In the Central depository of Armenia for armenian corporate securities (if the register of those securities is being kept in CDA).

c) In separate securities account at the Bank’s partner investment bank for foreign securities.

• The Customer’s securities and funds as well as financial benefits resulting from management of the above mentioned assets must promptly be separated from the Bank’s own assets and returned to the Customer upon the first request of the Customer in case of bankruptcy or insolvency of the Bank. Moreover, obligations and liabilities of the Bank resulting from the deals executed on behalf of the Bank and at the expense of the Customer pass to the Customer.

Procedure on provision of comprehensive services to the customers in the Government securities’ market (in Armenian)

Brokerage Services

Our brokerage services are focused on buying and selling securitieseither on behalf - and under the direction - of our clients, or in our own name. We also offer a full range of associated services, including advice on mediation and litigation. Our brokerage services include:

  • executing buy/sell orders of securities (including derivatives) and concluding securities deals (including repurchase agreements) on behalf and at the expense of the customer
  • borrowing and lending securities, as well as providing credit to purchase investments (“margin transactions”)
  • providing a full range of advisory and research services.
As a client of ArmSwissBank you will have an opportunity to invest in securities listed (quoted) in the following stock exchanges.

Further information on ArmSwissBank's brokerage services

Repo

In order to manage liquidity, the Bank offers its customers to do repo transactions for up to 3 months. The subject of repo transactions may be Government bonds and Corporate bonds quoted by the Bank at the trading session of the Armenian Stock Exchange. Customers can do repo transactions, in case, if their rights as bondholders are not restricted (bonds are registered in the depot account as free securities).

In order to get acquainted with the details of repo transactions you can call the Bank.

Acceptable securities, terms and interest rates for repo / reverse repo transactions

Only those Bonds for which their owner rights are not restricted may be subject to repo transactions.

Acceptable securities

  • Bonds issued by the Government of the Republic of Armenia and the Central Bank of the Republic of Armenia,
  • Foreign securities, which meet the requirements in Table 1.
Security type Rating by an international rating agency Transaction date
up to 7 days8-14 days
Government bond BBB- and higher 0.90 0.85
Low to BBB- from B-0.850.80
Corporate bond BBB- and higher 0.85 0.80
Low to BBB- from B-0.800.75
Share BBB- and higher 0.75 0.70
Low to BBB- from B-0.700.65

Bonds quoted by the Bank within the framework of providing Market Maker's services / list and quotations are available on the Bank's website /

Deadlines

The maximum term of repo / reverse repo transactions with bonds issued by the Government of the Republic of Armenia and the Central Bank of the Republic of Armenia is 92 days.The terms of transactions in other securities are set out in.Table 1:

Interest rates / defined on a daily basis /

Provided currency Up to 30 days 1 to 90 days
AMD 10.25% 10.25%
USD 5.00% 5.50%
EUR 4.75% 5.25%

Volumes

The maximum volume of repo / reverse repo transactions with bonds issued by the Government of the Republic of Armenia and the Central Bank of Armenia, as well as with foreign securities is set at AMD 50,000,000/ Transactions above the mentioned volume are carried out on a contractual basis /.

Evaluation

The valuation of RA government bonds subject to repo / reverse repo transactions is carried out on the basis of the information included in the document "List of acceptable securities for repo transactions with the Central Bank of the Republic of Armenia, prices and yield until maturity" published by the Central Bank of Armenia the day before the given transaction. Moreover, the evaluation takes place as follows:

  • In case of coincidence of the purchased asset and Repo currency, the yield to maturity for the given tranche is added to 0.75 / seventy-five hundredth / percentage point.
  • In case of mismatch between the purchased asset and the repo currency, the yield to maturity for the given tranche is added to 1.00 / one / percentage point.

Bonds quoted by the Bank as part of the Market Maker's services are subject to Repo / Reverse repo transaction bonds are valued at the Bank's current purchase yield plus the equivalent of 1% of the securities purchased and the repo currency in case of a match and 1.25% of the securities and repurchased currency.

ATTENTION: Brokerage service agreement will enter into force and become binding upon signing and shall be valid indefinitely.

The agreement can be unilaterally terminated by the customer notifying the Bank at least 10 days in advance. After terminating the agreement in a 3 day period the Bank has to return to customer or to his authorized representative all securities and monetary funds owned by customer.

In addition for making transactions according the requirements of orders the customer bears all the risks of the investments in securities. Bank will not compensate any losses if the losses are not caused as a result of improper conduct of the Bank.


Security operations procedure (in Armenian)


* In case of discrepancies between the published Armenian and English language information, the Armenian information prevails.