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Issuers/Registrars/Transfer Agents:::::::::
The companies or issuers of capital whose securities are converted from physical to electronic book entry securities play a significant role in the Central Depository System (CDS). To induct a security into CDS a security must first be declared as an eligible security (by fulfilling the admission criteria set out in CDCPL Regulations) for the purposes of CDS. Once a security is declared eligible for the purposes of CDS, the issuer is provided with the necessary software to connect to the CDS for verification and dematerialization of the said security and then only it can be inducted into CDS (made live in CDS).
The securities' induction is done in two phases:
• Eligibility Process
• Induction of an Eligible security
Eligibility Criteria:-
As per Central Depository Company of Pakistan Limited Regulations (CDCPLR), the Central Depository Company of Pakistan Limited (CDC) can declare any security (listed or unlisted) as an eligible security if it is satisfied that:
The issuer has the data processing capacity and operational capability.
The securities are valid, legal and transferable by book entry or otherwise.
The issuer has acquired or has the capability to acquire the capacity to communicate reliably with CDC in accordance with the procedures.
The issuer employs or has the capability to employ personnel familiar with the regulations and procedures to carry out its obligations.
If the issuer is a company, it is not in receivership, court appointed manager ship or liquidation or if the issuer is a body corporate, it is not under any equivalent form of administration.
The declaration of the Securities as Eligible Securities would be in the public interest.
Induction Process:-
Following is the procedure for induction of securities into the CDS:
A) Notice of Eligibility
A notice of declaration of Eligible Securities is given to the following, at least thirty days before the date of eligibility of the security or any earlier date as agreed between CDC and an Issuer of the security: \
• Issuer of the Security
• Relevant Stock Exchange(s) - In case of a listed security
• Securities & Exchange Commission of Pakistan
B) After the notice, a security induction package containing the following documents is sent to the Issuer. The issuers are required to return these documents at least two weeks before the preferable live date of the security in CDS to remove any mistakes or ambiguities on time.
Security Induction Package (SIP)
No. |
Documents |
Remarks |
1 |
Issuer Agreement |
The agreement states the terms and conditions agreed upon by both parties for induction of company's shares into Central Depository System (CDS). |
2 |
Issuer Admission Form |
The information pertaining to issuers as well as their Registrar/Transfer Agents (in case the issuer avails their services) is obtained on the form to set up the security in the CDS. |
3 |
Specimen Signature Card |
To obtain specimen signatures of authorized signatories of issuers and their registrars (if applicable). |
4 |
Specimen Board Resolution |
Certified true copy of the Board Resolution authorizing the company to enter into an agreement with CDC and nominating signatories on behalf of the company. |
5 |
Payment Invoice |
Deposit & Annual Fee (as per our fee and deposit schedule approved by the Securities & Exchange Commission of Pakistan) is to be paid by Issuer to CDC. The payment is made through Pay Order or a Demand Draft. |
C) In case of New RTA: On confirmation from the Issuer regarding availability of hardware, proprietary system software is installed at Issuer's / Registrar's premises.
D) A comprehensive training session is conducted to train the users of the CDS to their
satisfaction. The session explains in detail the concept & workings of the CDS.
E) Once the setup of the security is done in CDS; following Ids and passwords are sent to the issuers:
• CDS User IDs & Passwords
• Dialup ID & Password
F) The CDC notifies all its Participants/Account Holders either directly or through Stock Exchanges that the security has become live in the CDS.
| Gazette Notification of amendment in CDC Regulations |
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