With an ever increasing exponential growth in the Pakistani Capital Market during the early 1990s' causing a huge increase in trading volumes, the physical handling of paper-based shares/ certificates not only became laborious but also time consuming. The manual system was no longer feasible. It was in this perspective that CDC was incorporated to implement and operate the CDS and eliminate the tedious process of physical shares handling and transfer.
Experts from PriceWaterhouseCoopers conducted a study in 1993 to develop a conceptual framework for the depository. The study was sponsored by the United States Agency for International Development (USAID) and their report laid the foundation for depository design.
In November 1994, the Board of Directors at CDC awarded a turnkey contract to the IBM consortium for the implementation of the system in Pakistan. The IBM consortium proposed a comprehensive Master Implementation Plan (MIP) to the CDC Board after a detailed analysis of the following:
• National requirements
• Company and Banking laws
• Regulations & Procedures
• Financial and organizational aspects of the project
In April 1995, MIP was approved by the CDC board.
The infrastructural development included development and testing of software, hiring and training of personnel and establishment of CDC offices. The CDC offices at Lahore and Islamabad were connected to the head office through VSAT link leading to the development of a geographically neutral depository.