Monday, April 15, 2013

CDS starts operation

The much awaited operation of Central Depository System (CDS) has come into operation from today.
"The operation of CDS from today will make transfer of dematerialised shares immediately unlike the current practice of taking a fortnight to a month," said chief executive officer of CDS and Clearing Ltd (CDSC) Subodh Sharma Sigdel, here today.
There are currently seven depository participants, he said, adding that some three are are in pipeline.
The depository participants will hold the investor’s records in a dematerialised form and act like bank for the securities while CDSC is going to be the clearing house that will settle the account after each share transactions.
"From October 20, the listed companies have to dematerialise their paper share certificates completely as there will be no physical share transfer after six months, Sigdel added.
Likewsie, the central bank governor Dr Yubraj Khatiwada said that the capital market will be dynamic after the operation of CDSC.
The electronic settlement and clearance of share transactions is also expected to be less expensive for investors as the regulator has recently amended bylaws of CDSC.
However, the absence of listed companies that have yet to dematerialise shares is posing as the biggest impediment in CDSC operation. Among the 252 listed companies at the Nepal Stock Exchange (Nepse), only six have registered at CDSC for dematerialising shares.

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