Report on the Description of the National Settlement Depository Controls, Suitability of Controls Design and Operating Effectiveness,
12 October, 2015
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Objective 2. Controls provide reasonable assurance that securities are booked, removed and transferred between client accounts
in a complete, accurate and timely manner (and are based on client orders and securities certificates (registering their
movements) received from the registrars)
Ref # Control procedure
Testing performed
Results of tests
2.1
Functionality within Alameda automatically verifies whether input
information of service operations or client orders is matched to
existing internal data, whether all mandatory fields have been
completed, and whether necessary balances are available to
complete a transaction.
Inspected the verification procedure in Alameda and noted
that the system functionality prevents the processing of not
matched, incomplete information, or operations/orders with
insufficient balances.
No exceptions noted
2.2
Further processing and execution of service operations or client
orders in Alameda is possible only after verification from the
Controlling department.
If exceptions are identified then the service operations or client
orders are returned to be re-entered.
For a sample of executed service operations or client orders
in Alameda re-performed the verification procedure and
ensured no exceptions were present that would have
prevented the service operations or client orders from being
processed.
No exceptions noted
2.3
The report "processed operations" is generated as result of the
EOD (end-of-the-day) procedure in Alameda system and showing
operations processed and not processed. Report is reviewed by
responsible controller and all exceptions are identified,
investigated and resolved.
If no exceptions are identified then the report "processed
operations" is authorized by a responsible controller, which means
that all client orders to all transactions performed were reconciled.
For a sample of days inspected the reports "processed
operations" and ensured no exceptions were present that
would have prevented the reports from being signed.
No exceptions noted
2.4
Alameda users (NSD employees) do not have authority to change
parameters of the orders made by the depository clients and
received with EDM.
Observed the order receiving process in Alameda and noted
that the system does not give the authority for NSD
employees to change parameters of client orders received
with EDM.
No exceptions noted
2.5
Functionality within Alameda automatically generates a message
to higher rank depositories and dispatches it via SWIFT without
access for manual intervention.
Observed the message generating and dispatching process in
Alameda and noted that the system does not give the
authority for NSD employees to change the message to
higher rank depositories.
No exceptions noted
