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Message
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Dear
Readers,
 As
you are aware, CDC completed ten years of successful operations
in September last year. Looking back, it is heartening to realize
that the efforts made towards the development of Pakistani Capital
Market have really made a difference. We are on a much solid ground
today and the journey of success has gained momentum every passing
year.
Customer
is still at the core of CDC's day-to-day business and this is
evident from our constant innovation, and increasing efficiency
in operations and customer services. It is our constant effort
to introduce new client centric services devised on the standards
of effectiveness, increased workflow speed and ease of procedures,
focused on strengthening capital market processes and transactions.
Whether it is the Investment Road Shows held locally and abroad;
the IAS Web and IVR facilities, or the upcoming Fund Management
System or R/TA services, CDC is becoming synonymous with novelty
and innovation.
CDC
has experienced immense growth in every definition of magnitude,
multiplying the number of its human capital, volume of transactions
processed and number of clients served. Our people now represent
CDC, the Pakistani capital market and sometimes, even the country
at local, regional and international platforms. Our role in streamlining
and strengthening the capital market in Pakistan has been acknowledged
on all forums and has given us new vigor to work even harder to
further improvise mechanisms and smoothen procedures. It is a
matter of pride for us that we have been rated as one of the three
top brands of the financial industry.
CDC's
customer newsletter ‘The Custodian Slate' has now become a touch-point
interface, a communication link between CDC and its clientele,
giving an insight into the happenings of a whole quarter at CDC.
We are, however, in the process of making it more comprehensive
and reader-focused and would appreciate any comments and suggestions
to help us improve.
Cheers
to hardwork, development and growth of the Capital Market in Pakistan
!
Warm
Regards
Ejaz Ali Shah
General manager-Head of Marketing
& Customer Support Services
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Fund
Management System shortly going live :::::::::
CDC
started its Trustee and Custodial services in 2002 with only 2
open-end mutual funds having net asset value of PKR 500 million.
In a short span of time, it has emerged as the largest and most
preferred provider of Trustee & Custodial services in the
private sector, boasting a clientele of the country's leading
Asset Management Companies. The confidence of the mutual fund
industry is shown by assets worth of PKR 250 billion currently
under the management of CDC. Evident by the volume of these assets,
this unshakable trust has developed over a decade due to CDC's
service excellence and the reliability and transparency of the
Company's processes.
Owing
to its unswerving commitment to quality service and constant innovation,
CDC has taken a step forward by indigenously developing a comprehensive
Fund Management System (FMS), all ready to be launched shortly.
FMS
is an electronic system that will create automated interface between
all its elements to ensure Straight Through Processing (STP) for
settlement of transactions. It will create an online link between
the Trustee and Custodial Department at CDC and AMCs & Settling
Banks. This enhanced service facility will prove to be a value-added
feature for the clients of CDC Trustee and Custodial Services
due to efficiencies added through the automation.
The
main features of FMS include:
- On-line transmission of instructions from fund managers to
the trustee
- Management of electronic pay & collect system through
banking channels
The
implementation of FMS will bring efficiency in the workings of
all its elements by eliminating manual processes and duplication
of work and in minimizing chances of errors. Through this system,
AMCs will be able to pass online instructions of unit management
to the CDC Trustee and Custodial department. FMS will provide
a single link through which funds can complete transactions as
well as avoid multiple individual connections that are costly
and inefficient.
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CDC awards
Web Portal Development contract to KalSoft
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Central
Depository Company of Pakistan recently awarded a Web portal development
project to KalSoft. This Web portal will act as CDC's single point
of access to information on the Web, facilitating customers with
value-added online services and providing updated, regular and
complete information.
The CDC Web portal aims to develop a financial industry based
Internet portal displaying a wide portfolio of services offered
by the Company. The portal will comprise of an interactive, user
friendly and highly functional structure, design and layout. This
would satisfy CDC's need for a dynamic Internet presence to cater
to the ever increasing trends of online information searching,
especially by the CDC clientele and stakeholders.
|
Sitting (from left to right): Ejaz Ali
Shah , General Manager – Head of Marketing & Customer
Support Services, CDC; Kamran Qazi, CFO & Company Secretary,
CDC; Yasar Noor, SVP – Sales & Subsidiaries, KalSoft;
Fahad Shameem, GM Sales – South Pakistan, KalSoft. Standing
(from left to right): Syed Faisal Hashmi , Manager – Marketing
& Customer Support Services; Ali Bilal, Assistant Manager
– Marketing & Customer Support Services; Waqas Hashmi,
Senior Manager – Sales, KalSoft; Nawaz Ahmed, Senior Project
Manager, KalSoft. |
The
customized Content Management System (CMS) developed and provided
along with the portal will enable CDC to cater to the business
needs of its customers more efficiently and proactively. The contract
also includes CMS training sessions to be conducted by KalSoft
trainers for CDC employees, allowing them to independently manage
and operate the Web portal on their own.
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CDC
to launch R/TA Services from May 2008
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An
Interview with Mr. Muhammad Hanif – CEO Central Depository Company
of Pakistan
 Tell
us about this new business initiative of CDC and how do you see
its role in bringing efficiency in the market processes?
MH : CDC has been constantly taking
initiatives since its inception for the development of the capital
market in Pakistan . It was inherent of CDC to start R/TA Services
in accordance with other capital market dominant facilities offered
by the Company and it is the right time too. The CDC - R/TA Services
are in line with our realization of the importance of R/TA functions
in upholding trust of Issuers and their shareholders.
The
idea to introduce R/TA services was marked by a sheer commitment
to quality service. It was initiated to cater to a desperate need
of a synergy between depository and R/TA services on a single
platform. CDC aims to define new standards in the domain of R/TA
services.
What
do you ascertain could be CDC's competitive market edge in terms
of R/TA services?
MH : CDC's competitive edge for R/TA
services comes from a combination of a variety of customer-centric
facilities. CDC will provide a one-window solution to shareholders,
backed by a country - wide branch network and state-of-the-art
IT infrastructure .
The
most important feature that gives CDC a real edge over other R/TA
service providers is its Business Continuity Plan (BCP) supported
by backup sites and disaster recovery capabilities to ensure recovery
of the service immediately in case of any disaster.
Additionally,
CDC has taken a step further and developed a high-tech Share Accounting
System with exclusive Authority & Security Management System
and workflow components to guarantee efficient functionality.
Also, independent Legal and Internal Audit departments ensure
legal and regulatory compliances.
Moreover,
a well equipped call center backed by trained and dedicated customer
support staff will facilitate issuers and shareholders on a day-to-day
basis.
What
services will CDC R/TA provide to its clients, the issuers? And
what value would it add from their share holders' point of view?
MH : CDC - R/TA will offer a fully comprehensive
portfolio of services encompassing all types of m aintenance,
registration, verification, direct customer dealing and interaction.
This service will provide an added level of convenience to shareholders
and credibility and security of information to issuers.
IAS
and T&C have been successful in terms of market response.
Do you foresee the same success for R/TA and why?
MH : IAS and T&C have not been just
successful, rather tremendously successful! Majority of the investors
are availing these services from the CDC platform and rate them
as highly efficient.
The
CDC - R/TA facility is complimented by a branch network, a customer
support department and Business Continuity capabilities, giving
us an ability to deal with extraordinary circumstances. If compared
to other R/TA service providers, our R/TA service will function
with a lesser chance of error. For these reasons, I am optimistic
that CDC's R/TA services will also receive a positive response.
Why
did CDC choose RTA services as the next business venture?
MH : R/TA is one of the most important
services required by a capital market in any country or region.
The inception of CDC and NCCPL and their alliance
with the highly automated stock exchanges has created an efficiently
functional capital market infrastructure, streamlining day-to-day
processes and minimizing chances of errors.
Considering
the current scenario, CDC realized the desperate
need of more comprehensive and efficient Registrar / Transfer
Agent Services.
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Investment
Road Show in Faisalabad
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 Central
Depository Company launched a series of Investment Road Shows
in 2005 with a vision for wide scale development of the Pakistan
Capital Market and to educate investors throughout Pakistan and
abroad. These target-driven events have now transformed into a
platform for the capital market leaders and executives to meet
the investors and stakeholders and play a key role in increasing
the investment base in the country.
In
a strive to continue the quest for market development, CDC has
already organized road shows in 6 major cities including Sialkot,
Peshawer, Hyderabad, Quetta, Multan and Sukkur. The seventh and
latest show in this series was organized in Faisalabad at a local
hotel on March 17, 2008 .
A diverse
group of speakers from the capital market enlightened the audience
about the processes, requirements, and benefits / risks of investing
in the stock market. Mr. Adnan Afridi, Managing Director, Karachi
Stock Exchange and Mr. Muhammad Hanif, CEO Central Depository
Company highlighted the role and day-to-day management of their
respective entities.
 Mr.
Muhammad Hanif also highlighted that the electronic process introduced
by CDC has rid the market from time-consuming procedures for transfer
and pledging of securities and has facilitated the efficient credit
of corporate benefits. He also said that CDC is all ready to start
Registrar / Transfer Agent Services shortly to further facilitate
the investors.
Earlier
in his welcome address, CDC's Chairman, Mr.Mohammad Bashir Janmohammed
said that CDC, SECP and KSE are going to an extra mile, apprising
investors from distant cities about the benefits of the Capital
Market business and to provide a platform for professionals to
reach these investors.
Mr.
Rashid I. Malik, Commissioner - Company Law & SMD, SECP, appreciated
CDC's initiative of educating investors, which is giving strength
to the capital market, helping it evolve into an efficient and
well- info rmed market.
Mr.
Adnan Afridi, Managing Director, Karachi Stock Exchange explained
the workings and performance of the exchange with special reference
to future plans including demutualization of KSE.
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Integration
of South Asian Capital Markets, Challenges and Prospects
:::::::::
 The
2nd South Asian Capital Market Conference was held in Dacca from
January 31 to February 1, 2008 . Representing CDC at this important
forum, Mr. Fazal Hussain Gaffoor , Chief Internal Auditor, CDC
Pakistan shared his knowledge on “Integration of South Asian Capital
Markets, Challenges and Prospects.” Following are some important
issues highlighted by him at the Conference.
During
the recent years, the securities markets have experienced increased
globalization and integration. This has created new investment
and financing opportunities for investors who, for entering new
markets, needed to have access to the local securities market
infrastructure. Furthermore, the international financial community
has also increased its expectations of free access to accurate
information of all local markets, as well as immediate and smooth
execution of transactions.
The
European Experience:
The development of the European capital market was fostered
by the liberalization of the national capital markets, rapid technological
progress and major advances in telecommunications and has led
to the creation of new investment and financing opportunities
for investors. Moreover, the introduction of Euro has eliminated
currency segmentation, increasing the homogeneity of the European
securities markets.
The
above scenario has posed pressure on service providers to deliver
cost-efficient and safe securities infrastructure both at the
national and cross-border levels. Consequently, all parties concerned
– institutional investors, financial intermediaries, and securities
clearing and settlement service providers – have quickly adjusted
the level and features of the services they offer in order to
cope with the new situation in Europe.
This
trend, in addition to the globalization of the national economies,
has triggered a huge increase in cross-border transactions, which
highlights the importance of efficient clearing and settlement
facilities at a cross-border level. In this context, the need
for further restructuring to establish a common platform for securities
clearing and settlement systems in Europe was felt.
Hurdles
in adopting European model:
The European model however cannot be implemented in its
entirety to Asia and the SAARC region mainly due to reasons such
as absence of key currency, legislation surrounding securities
markets in the region, inactive cross-border trading within the
region, differences in the need for cross-border settlement and
political issues. Because of these reasons, only few Asian countries
with highly developed infrastructure have established links mostly
for the settlement of bonds.
The
Way Forward:
To take advantage of cross-border linkages, SAARC needs
to clearly identify its needs and also study the European experience
closely. Further, SAARC should start working on the relaxation
of non-supervisory restrictions against access by foreign financial
intermediaries to the domestic financial markets and harmonization
of standards in the financial system. Cooperative efforts in financial
system development among SAARC countries should also be strengthened.
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Notice
Board :::::::::
Authorization
to be obtained from Sub Account Holders for CFS MK-II
With the introduction of CFS Mk-II Market by the Securities
and Exchange Commission of Pakistan (“Commission”), new Regulations
have been prepared to be included in the CDCPL Regulations subject
to approval of the Commission to handle matters relating to CFS
Mk-II Transactions in the CDS.
According
to the new Regulations, all CDS Participants are required to obtain
written authorization from their Sub-Account Holders before entering
into a CFS Mk-II transaction on their behalf and to retain such
authorization for production to CDC on request. Such authorization
shall cover the following activities to be performed under and
in terms of the CDC Regulations:
•
Automated movement of CFS Mk-II Financed Securities prior to and
after the commencement of book closure period as announced by
the Issuer of such CFS Mk-II Financed Securities; and
•
Delivery of CFS Mk-II Financed Securities from their Sub-Accounts
under the control of a Participant, being an Authorized Financier
(CFS Mk-II Account Holder) to the National Clearing Company of
Pakistan Limited (“the Clearing Company”) where such Authorized
Financier is declared a defaulter by the Clearing Company.
All
CDS Participants are therefore advised to obtain and retain such
authorization in fulfillment of the said regulatory requirement.
Amendments
in CDC Regulations
Amendments have been made in CDC Regulations and Schedule
of Fees & Deposits relating to following matters as published
in the official Gazette of Pakistan:
Date
of Gazette Notification: December 19, 2007
Deletion
of all Provisions and References relating to ‘Delivery versus
Payment' including deletion of Chapter 10 in its entirety.
Date
of Gazette Notification January 16, 2008 :
•
Procedures for prescribing the structure of transactions and parameters
of reports in the CDS including matters relating to carrying out
on any transactions in the CDS – [change in Regulation 3.7.1]
•
Issuer-related activities [inserted a new Chapter 8F]
•
Prescribing Additional Registration Details – [change in Regulation
6.3.1]
•
Tariff for handling conversion of securities [change in Note No.
6 of Schedule of Fees & Deposits]; and
•
Tariff for providing short messaging service to Investor-Account
holders in CDS [a new tariff included in Schedule of Fee for Investor
Account Services]
Date
of Gazette Notification March 19, 2008 :
•
Sending of notices and documents through email address of the
Sub-Account Holder by Participant – [change in Regulation 6.2A.1]
•
Waiver of custody fee where the Issuer goes under Liquidation
(except voluntarily), Receivership or court-appointed Managership
or equivalent form of Administration [change in Note No. 3 of
Schedule of Fees & Deposits]
Note
: Please visit our corporate website ( ) for updated versions of CDC Regulations and Schedule of
Fees & Deposits incorporating the above amendments.
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CDS
Update :::::::::
First
CFS Automated Transaction
The first Automated Corporate Action for CFS Accounts
took place on January 24, 2008 with its execution of corporate
entitlement for Dewan Cement Limited. With this functionality,
corporate entitlements of a security are automatically credited
to the accounts of the respective ‘Financées' instead of
the ‘Financier'. This new mechanism enables the shareholders (Financées)
to receive their entitlements directly in their own name with
convenience.
Previously,
in the event of corporate action, entitlements due on CFS securities
were credited /issued to CFS blocked accounts and subsequently
entitlements were required to be transferred by the financiers
to the fiancées in collaboration with the stock exchanges
through a manual process.
In
order to ensure smooth execution of the Automated Corporate Action
for CFS Accounts, stakeholders are once again reminded of the
following:
- The same UIN must appear in both NCS S U IN Database as well
as CDS
- Financee must maintain House/Sub-Account under Broker Participant
- Financier must maintain only one CFS Financier Account for
each Stock Exchange (SE) location
- Financier should ensure availability of Securities in respective
accounts
- Securities pledged through House Account must be released
prior to the start of the Book Closure period
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The
Lighter side of life :::::::::
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Capital Market Lookup |
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Securities
Joined CDS this Quarter |
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Securities
Revoked / Delisted from CDS this Quarter |
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Securities Declared
Eligibe for CDS this Quarter |
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Breakup
of Securities in CDS |
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CDS
Summary |
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Investor
Accounts Statistics (Mar 31, 2006) |
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Corporate
Actions Handled During this Quarter |
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Summary
- Trustee & Custodial Operations |
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