Central depository company (cdc)


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Central depository company (cdc)

  2. 2. BACKGROUND In 1993 USAID sponsored study was conducted to develop a conceptual framework for the depository system. This report laid the foundation for depository design. In 1993, CDC was incorporated to implement and operate the Central Depository System and eliminate the tedious process of physical shares handling and transfer.
  3. 3. ESTABLISHMENT: Central Depository Company of Pakistan Limited (CDC) was incorporated as a public limited company (Unlisted) in 1993. The Company started operations in September 1997. CDC is the only depository in Pakistan, handling the electronic (paperless) settlement of transactions carried out at all three stock exchanges of the country.
  4. 4. OBJECTIVE CDC was primarily established to operate the Central Depository System (CDS) for equity, debt and other financial instruments that are traded in the Pakistani Capital Market.
  5. 5. CENTRAL DEPOSITORY SYSTEM (CDS) CDS is an electronic book entry system used to record and maintain securities and their transfer’s registration. The system changes the ownership of securities without any physical movement or endorsement of certificates and execution of transfer instruments. An IBM led consortium along with the management of the company implemented CDS in Pakistan.
  6. 6. OBJECTIVES: To provide secured and dependable services to the capital and financial market. To operate as a central securities depository on behalf of the financial services industry so as to contribute to the countrys ability to support an effective capital market system
  7. 7. SHARE CAPITAL: Authorized capital: Rs. 750,000,000 Issued, subscribed and paid-up capital:Rs.302,250,000.
  8. 8. SOURCES OF FUNDS CDC earn its revenue through;  CDS Operations  Investor Account Services  Trustee & Custodial Services  Facility Management Fee NCCPL  Other sources
  9. 9. MANAGEMENT Management of CDC consist of a chairman , chief executive officer along with 9 member board of directors the chief executive officer is the head of a company and all the departments and board of directors report to him. Mr. Muhammad Hanif is the CEO of the company.
  10. 10. BRANCHES Its main office is situated in Lahore and three other branches are located in Karachi, Islamabad and Hyderabad.
  11. 11. FUNCTIONS CDC Pakistan provide following main services to its clients in financial and capital market: 1. Investor Account Services. 2. Trustee & Custodial Services. 3. Customer Support Help Desk. 4. Account Statement Verification. 5. Global Terminal Facility. 6. CDC E-mail Facility. 7. Training
  12. 12. INVESTOR ACCOUNT SERVICES This service allows investors to directly open and maintain accounts in Central Depository System (CDS) for electronic settlement of securities. Before IAS to settle the securities through Central Depository System, investors had to open client accounts (sub accounts) with the Participants (brokers & financial institutions). Now with IAS, investors can also have direct access to CDC.
  13. 13. INVESTOR ACCOUNT SERVICESELIGIBILTY CRITERIA:The following are eligible to open Investor Account with CDC:1. Individuals who are Pakistani nationals (Residents/ Non Residents), Foreigners and;  Are not minor (Minors can open IAS accounts through their legally acceptable guardians).  Are not of unsound mind.  Have not applied to be adjudicated as an insolvent, have not suspended payments and have not compounded with their creditors  Are not undischarged insolvent.2. Other than Individuals such as corporate entities, trusts, societies, etc. 
  14. 14. INVESTOR ACCOUNT SERVICES BENEFITS:  Investors have full control over their securities which are maintained by CDC and account is operated only on the instructions of investors.  By opening Investor Accounts with CDC, investors are able to fully control their electronic securities. Although trading is still done through brokers, settlement is done through CDS on written instructions from investors.
  15. 15. TRANSACTIONS IN IAS DepositInvestors can deposit their securities directly into their Investor Accounts through IAS.IAS Account Holders can deposit only those physical securities in their IAS Account which are duly transferred in their own names.
  16. 16. TRANSACTIONS IN IAS Delivery Out At the time of opening of Investor Account, an investor is given a transaction order book (similar to a bank cheque book) for delivery out transactions. Delivery In: An investor needs to provide his/her Investor Account number to the Participant in order to transfer securities in his/her Investor Account with CDC.
  17. 17. TRANSACTIONS IN IAS Withdrawal an investor needs to fill out the Securities Withdrawal Form (SWF) along with share transfer stamps as per the prevailing rate and submit it at the front desk of IAS department
  18. 18. CLOSING OF INVESTOR ACCOUNTSTo close an Investor Account, an investor has to intimate CDC through Account Closing Request Form (ACRF) duly signed by all authorized signatories. The account will not be closed in the following circumstances:  If the cash or security balance of Investor Account is not zero.  If there is any pending corporate action awaiting credit in Investor Account.  If there is a pending withdrawal request.
  19. 19. TRUSTEE AND CUSTODIAL SERVICESCentral Depository Company started Trustee & Custodial Services in 2002, initially with two open-ended mutual funds having net asset value of Rs. 500 million.CDC currently provides T&C Services to more than 77 mutual funds managed by various Asset Management Companies (AMCs) with an aggregate fund size of approximately Rs. 200 billion.
  20. 20. TRUSTEE AND CUSTODIAL SERVICES The prime responsibility of CDC as the trustee/custodian is to take into its custody all the assets of the Collective Investment Scheme and hold them in trust on behalf of the unit or certificate holders. They also carry out the instructions of the asset management company/investment adviser in respect of the investment portfolio and the units/certificates held by the investors,
  21. 21. SHARE REGISTRAR SERVICES CDC offers Shares Registrar Services (also known as Transfer Agent or R/TA services) to facilitate Issuers and their shareholders. CDC initiated this service in 2008. CDC is the first company in Pakistan, providing SRS facility to its client. CDC - SRS offers a composite portfolio of maintenance, registration, verification and direct customer dealing & interaction.
  22. 22. SHARE REGISTRAR SERVICESFollowing is the scope of services that would be provided under the umbrella of CDC – SRS Services. Maintenance of computerized Members’ Register Maintenance of specimen signatures of share holders Dealing with share holders on SRS Service Counter, telephone and through mail. Verification of share holders’ signatures on Transfer Deeds and Proxy Forms etc. Physical Transfer of Securities, Deposit of Securities into CDS, Withdrawal of Securities from CDS and transmission of physical certificates / Securities. Split / Consolidation / Renewal of certificates
  23. 23. SHARE REGISTRAR SERVICES Dividend Entitlements and Payments to share holders Bonus Shares issuance to share holders with fractional shares payment Custody of undelivered certificates and dividend warrants, etc. Preparation of reports related to the securities and share holders Taking attendance of share holders in Annual General Meeting (AGM) / Extra-Ordinary General Meeting (EOGM) Compliance of legal obligations as Share Registrar Other standard Share Registrar department activities such as dispatch of Annual / Half Yearly Accounts, etc.