Author: cdc_admin

CDC introduces eDividend facility

Continuing the trend of being at the forefront of innovation in capital market development, the Central Depository Company of Pakistan Limited became the pioneering institution in the country to introduce eDividend facility. This service enables issuers to electronically credit dividend amounts into bank accounts of shareholders directly without the need of any paper formalities or manual effort.

 

The first such transaction was executed for the dividend of Lucky Cement Limited through its banking partner. Innovative offering of services like this has enabled CDC to achieve another milestone in Share Registrar Services after exceeding 100 clients in a short span of time.

CDC’s Trustee & Custodial Services achieves 100 funds

Central Depository Company’s Trustee and Custodial Services department has recently achieved 100 funds under its client umbrella with aggregated net assets of more than Rs. 177 billion.

 

Recently KASB Capital Protected Gold Fund and NIT Income Fund joined CDC for its trustee services taking the count of mutual funds under CDC’s trusteeship to 100 funds. With this achievement, CDC has reiterated its position as the market leader in private sector. Since its launch in 2002, CDC Trustee and Custodial Services has become the preferred choice of Asset Management Companies (AMCs) and Pension Fund Managers due to excellent service quality, professionalism, apt business knowledge and adherence to rules & regulations.

 

The prime responsibility of CDC as the trustee/custodian is to take into its custody all assets of the Collective Investment Scheme and hold them in trust on behalf of the unit or certificate holders. Additionally, CDC carries out the instructions of the Asset Management Company, investment adviser and pension fund manager in respect of the investment portfolio and the units/certificates held by the investors. CDC also ensures that the scheme is being managed in accordance with the provisions of the constitutive documents, the NBFC Rules, the Regulations and Voluntary Pension Scheme (VPS) Rules.

 

Recently, CDC has taken a step forward by indigenously developing a comprehensive Fund Management System (FMS) for its Trustee and Custodial Services clientele. FMS is an electronic system that creates automated interface between all its elements to ensure Straight through Processing (STP) for settlement of transactions. It establishes an online link between the T&C Department at CDC and AMCs & Settling Banks through online transmission of instructions from fund managers to trustee and management of electronic pay & collect system through banking channels. The implementation of FMS has eliminated manual processes and duplication of work and has helped minimize chances of errors. Through this system, AMCs can pass online instructions of unit management to the CDC Trustee and Custodial department. FMS provides a single link through which funds can complete transactions as well as avoid multiple individual connections that are costly and inefficient.

Central Depository Company conducts Investor Awareness Seminars in upcountry

After a successful campaign in Karachi and Hyderabad, CDC conducted Investor Awareness Seminars in Lahore, Islamabad, Rawalpindi, Multan, Gujranwala and Faisalabad from 16th to 22nd March 2014. These seminars were organized particularly in the context of current regulatory initiatives where subscriptions of CDC Access SMS and Email Alerts have been made mandatory by the Securities & Exchange Commission of Pakistan. This initiative was also taken in line with CDC’s belief that an informed investor is more enabled to keep his investment secure. The audience was briefed about CDC’s role, responsibilities and service offerings. The free-of-cost CDC access portfolio was also introduced. Investors were apprised about their role, responsibilities and rights as well.

 

Constructive criticism from the attendees included a demand that all Capital Market entities should conduct collaborative programs so that all the stakeholders can come under one roof and discuss concerns, opportunities and challenges. According to them such acts of solidarity will quash uncertainty, doubts and rumors which always surround the capital market, giving investors the feel-good factor that their investment portfolios are in safe hands. It was also suggested that mechanisms and processes that ratify the Broker’s trustworthiness should be devised. Officials from SECP and ISE also attended the seminar held in Islamabad.

 

The attendees in almost all cities also stressed that CDC should show presence on a monthly basis in the form of day-long sessions or IPV desks. All the queries and concerns were dealt with expertly by the CDC team.

CDC to provide Settlement services for Government Securities traded on KSE’s Bond Trading System

Being at the forefront of capital market development since its inception, CDC has introduced a number of initiatives and undertaken many challenges.  Recently, another major milestone was marked in the ever-progressing timeline of CDC with the initiation of settlement of Government Securities through KSE’s bond trading platform. This is a substantial development for Pakistan Capital Market as for the first time the retail segment will have a liquid and direct platform for trading in Government Securities through KSE’s Bond Automated Trading System (BATS).

KSE undertook this project at the initiative of the honorable Federal Minister for Finance, Revenue, Economic Affairs, Statistics and Privatization, Mr. Mohammad Ishaq Dar, who had urged the management of KSE and SBP to lay the groundwork. A committee was then established comprising of the senior most representatives of CDC, KSE, NCCPL, SECP and SBP as well as the leading money market brokers and banks. After much deliberation, the operational framework for the initiative was established. A key element to this endeavor was SBP conferring upon CDC special participant status in the Pakistan Real-time Inter-bank Settlement Mechanism (PRISM) and Real Time Gross Settlement (RTGS). The stepping stone for this was the launch of Investment Portfolio Services (IPS) by CDC whereby investors can open IPS accounts (directly maintained at CDC for investment) in GoP securities. CDC is the only non-banking institution to be given this capacity.

 

All trades take place on BATS, which is a trading platform developed by KSE for the trading of fixed income securities. Prior to the launch of this service, trading in government securities was done over-the-counter, and the retail involvement was negligible. The BATS platform will provide the transparency and liquidity which are essential in order to accommodate the retail segment in this ground-breaking initiative.

Formal trading began with a soft launch on January 31, 2014 at the KSE premises. Later, the official launch of the service took place on February 18, 2014 in Karachi at a local hotel. The invitees included senior management from CDC, KSE, Pakistan Capital Market and the banking sector. The guest of honor was the honorable finance minister, Mr. Muhammad Ishaq Dar, who held the honors of the gong ceremony.

Government Securities are issued by the State Bank of Pakistan on behalf of Ministry of Finance. These securities are considered low-risk primarily due to the fact they have sovereign guarantee of the government. Currently, this facility extends to three types of securities which include:

  • Treasury Bills: Short-term zero-coupon instruments that are issued at discount with maturities of 3-month, 6-month and 1-year.
  • Pakistan Investment Bonds: Long term bonds which pay fixed semi-annual coupon in addition to repayment of principal at maturity. They are issued at maturities of 3, 5, 7, 10, 15, 20 and 30 years.
  • Ijara Sukuk: A Shariah-compliant Islamic floating and semi-annual coupon bond.

Investors wishing to trade in government securities need to open their IPS accounts with CDC by submitting the account opening form along with fulfilling all the necessary formalities. A key feature of this facility is a facilitation agreement which needs to be signed between CDC and all the relevant parties involved (investor and broker). In addition to this, another integral aspect of this service is that trades are only executed for good value positions. This means that investors need to ensure availability of funds or securities prior to execution of the trade. All trades will be on a delivery versus payment mode, i.e. delivery will be only against actual payment received.

CDC has always strived for the development of financial markets and this initiative by KSE is one of the many that are testament to its vision. By investing in government securities, investors can have the comfort of risk-free returns through an efficient and effective framework that allows them to maintain control and broaden their investment horizon.

ITMinds Limited to support ABL AMC’s Pension Funds Service

ABL Asset Management Company Ltd. (ABL AMCL), a wholly owned subsidiary of Allied Bank Limited (ABL) and ITMinds Limited (a wholly owned subsidiary of Central Depository Company of Pakistan Limited), signed an agreement enabling ITMinds to provide back office services for two upcoming Pension Funds of ABL AMCL.

 

The agreement was signed by Mr. Farid Ahmed Khan, CEO – ABL AMC and Syed Asif Shah, CEO – ITMinds Limited in presence of Mr. Mohammad Hanif Jakhura, Director ITMinds and CEO of Central Depository Company of Pakistan Limited.

 

This arrangement will provide ABL AMCL a dynamic platform to increase efficiency and reliability of services, resulting in improved investor satisfaction. ITMinds shall be providing services for settlement, unit management operations, NAV calculation / financial statements, business continuity and IT management. The firm will be launching both conventional and Islamic pension funds in coming weeks.

 

Besides back office services, ITMinds Limited also provides IT consultancy and implementation services to organizations both locally and internationally, especially in Middle East & Africa.

 

ABL Asset Management is one of the largest fund managers in Pakistan with total assets in management of over Rs 27bn. It currently manages eight listed funds and is the only fund management company in Pakistan which is both GIPS and ISO 27001 compliant. It also has one of the largest distribution networks in the country and its funds are available in over 900 branches of Allied Bank throughout the country.

Muhammad Hanif Jakhura, CEO-CDC elected as Chairman of Executive Committee of Asia-Pacific Central Securities Depositories Group in its 17th Annual General Meeting in Dhaka

Muhammad Hanif Jakhura, CEO-Central Depository Company of Pakistan Limited has been elected as the Chairman of Executive Committee of Asia-Pacific Central Securities Depositories Group (ACG) for a three year term during the proceedings of the ACG 17 Annual General Meeting held in Dhaka from October 20-21, 2013. Consequently, Central Depository Company of Pakistan Limited has also become the ACG Secretariat for the next 3 year term. These two announcements came as a high-point of the event since the other members of the EC included China, Japan, India, Singapore and Korea.

 

The Asia-Pacific Central Securities Depository Group (ACG) is a representative organization of Securities Depositories and Clearing Companies of the region and is working to facilitate the exchange of information and promote mutual assistance among members. CDC is amongst ACG’s 32 member institutions that represent 23 countries.

 

With this appointment, Muhammad Hanif Jakhura will also be representing the Asia-Pacific Region on the Executive Board of World Forum of CSDs (WFC), the global body of five regional CSD associations including Americas’ Central Securities Depositories Association (ACSDA), Association of Eurasian Central Securities Depositories (AECSD), European Central Securities Depositories Association (ECSDA), Africa and Middle East Depositories Association (AMEDA) and ACG.

 

He will serve on the Steering Committee of WFC 2015, a bi-annual global event of CSDs around the world. He will also be representing ACG on other platforms like International Securities Services Association (ISSA), Association of Global Custodians (AGC) and the Committee on Payment and Settlement Systems of the International Organization of Securities Commissions (CPSS-IOSCO).