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About the author

Germán Gutiérrez Mejia

Associate Director | Financial Market Infrastructure

Germán Gutiérrez is Thomas Murray’s Associate Director, Financial Market Infrastructure (FMI). He joined the company in 2012 as a research analyst, monitoring market developments in the Americas and Eurasia, on which he is a subject matter expert. Since 2022 he has been a Regional Head, leading the team covering the Americas, Africa and the Middle East. He is responsible for the development of Securities Market Information profiles and conducts risk assessments of FMIs in different continents and jurisdictions.

Thomas Murray Ltd, the global post-trade risk and custody specialist, has upgraded the Central Securities Depository (CSD) risk assessment for the Dominican Republic’s CSD, CEVALDOM S.A., from A to A+, which denotes a ‘Low Risk’.

The overall assessment of ‘A+’ reflects the weighted average of eight individual risk components and indicates a low-risk exposure profile, with an outlook of ‘On Watch’. This grade places CEVALDOM above the average for the Americas CSDs (currently at A) covered by Thomas Murray.


At the time of the assessment in July 2022, market activity volume was dominated by over-the-counter (OTC) transactions and settlement was being conducted on a gross-gross basis through an efficient arrangement with around 140 batches. The settlement model used by CEVALDOM affords limited or almost zero asset commitment exposure for its participants during the settlement process. 

However, although fails are rare, the market was lacking settlement fails management arrangements to reduce participant exposure to liquidity constraints deriving from the late delivery or non-availability of assets. It is important to note that a new model addressing this issue to assure completion of settlement was implemented on 1 November 2022, and its performance is being monitored. 

Settlement is conducted using ‘central bank money,’ and trading and settlement volumes are highly concentrated in a few participants. 

Regulatory environment

CEVALDOM operates in a strongly regulated legal environment in order to protect investors’ assets, where full segregation of securities holdings at the level of individual clients is required and the records of ownership kept by CEVALDOM prevail above those of their participants. 

International CSDs or global custodians are allowed to open omnibus accounts, however, even though the market does not fully recognise the nominee concept. Taking into consideration that the Dominican market is almost 100% fixed-income driven, and that the equities market is still to be developed, processing of corporate actions is not relevant and the CSD's processes and controls are focused on handling income payments.

Financial stability

CEVALDOM is financially a solid institution, with capitalisation ratios reasonably adequate for the size of the market, the turnover volumes and the total of assets under custody, potentially exposing it to significant adverse shocks as a result of unexpected events. 

The CSD has no outstanding debt, and has sufficient liquid net capital in the form of cash equivalent assets. Its sources of revenue are stable and reliable. In addition, CEVALDOM has comprehensive insurance coverage that protects it against multiple potential threats to its financial stability. 

Internal controls and policies

While the CSD currently does not have a recovery and resolution plan in place, one is under development and subject to the Board of Directors’ and the regulators’ approval. CEVALDOM has adequate internal control policies and procedures in place designed according to its Risk Management Process, which is based on ISO 31000:2018 standards. 

The CSD undertakes internal audits of operational controls and critical processes several times a year, and the annual external audit follows the ISAE 3402 Type II standard. 

The CSD arrangements for its IT infrastructure, disaster recovery and business continuity plans are well-structured and observe high standards. This reduces the probability of outages of its services, while increasing the security of the information. 

In terms of governance and transparency, the members of CEVALDOM’s board are all independent directors with wide experience in the industry. Its administrative and risk management arrangements are well-defined, structured and documented. 

Nevertheless, the CSD has some room for improvement in the “formal means” to communicate with its stakeholders (e.g. User Committee structure and meetings frequency), and to disclose information to the general public (currently available in the local language only).

Jim Micklethwaite

Director, Head of Operations for Thomas Murray

Thomas Murray is delighted to announce the risk assessment upgrade of CEVALDOM. The strength of the assessment reflects CEVALDOM’s well developed risk control framework and sophisticated operating model, which is in line with the best international standards. We will monitor CEVALDOM’s improvements as they further develop the CSD and the market

Freddy Rossi


As a financial market infrastructure and a systemically important entity, we are aware of the risks that arise in the constant evolution of the market we serve; so, our strategies are designed in accordance with best international practices and aimed at generating value for our stakeholders, through the fulfilment of our organisational purpose of bringing safety to the Dominican stock market thanks to adequate risk management, providing agility and efficiency to the market. The result of the risk assessment carried out by Thomas Murray fills us with pride, while challenging us to continue improving to support the growth of our market

The CSD risk assessment reviews and assesses the risk exposures for investors associated with the processes the CSD has in place to facilitate the safekeeping and the clearing and settlement of securities, where applicable. It assesses eight key risks (assessment components). 

The methodology 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 assessment, the scope and quality of the depository’s services is assessed. The assessments are on a consistent global scale, using the familiar AAA to C grading scale. Once the grading is assigned there is an ongoing surveillance process to monitor the depository.

Thomas Murray maintains proprietary assessments of over 140 CSDs globally as part of the Thomas Murray Depository Risk Assessment services.

The full Thomas Murray report is available to interested parties on request.