Author: Nusrat and Urusa

IBAN now a mandatory requirement for maintaining account with CDC

CDC’s core purpose is to automate Capital Market processes and make mechanisms smooth and efficient. In pursuance of this aim, the Company had been working towards introducing electronic disbursement of dividends mechanism by utilizing modern banking channels.

Recently, with the newly promulgated Companies Act, 2017, our efforts have been endorsed by the regulatory authorities. As per Section 242 of the Act, it has now become mandatory for all listed companies to pay dividends to their shareholders electronically. For companies to comply with this requirement it has become necessary that International Bank Account Number (IBAN) of investing public are available to facilitate payment of cash dividends in electronic mode.

As a result, CDC has made it mandatory for Capital Market investors to provide IBAN as part of the registration details for opening and maintaining Sub Account in the Central Depository System (CDS). This amendment in CDC Regulations has also been approved by Securities and Exchange Commission of Pakistan (SECP).
This regulation will help facilitate electronic payment of cash dividends directly into the bank account of shareholders, making the process in line with international practices.

The necessary tools for insertion of IBAN have also been made available in the Central Depository System (CDS) from September 14, 2017 (onwards) for the convenience of the clients. Furthermore, subscription of SMS alerts for all Resident Pakistani Individuals and email alerts for Foreign/Non-Resident Individuals and Corporate entities has also been made mandatory to maintain transparency by providing timely update of transactions.

Awareness sessions were also organized for all CDS Participants and Global Custodians to ensure smooth implementation of this regulation and ensure transparency.

CDC reduces Investor Account Annual Maintenance Fee

Central Depository Company’s (CDC) products and services are developed to facilitate Capital Market investors and promote investor protection. Over the years, the Company has taken a series of landmark initiatives to encourage and assist investors in their day to day activities. In line with this aim, CDC has drastically reduced the annual maintenance fee for its Investor Account by 27 percent, effective from July 2017.

It is not the first time that CDC has reduced tariff of its services. The Company proudly fosters a legacy of keeping investors’ benefit before Company interest. This recent reduction in fee allows Investors to open and maintain an Investor Account with CDC for only Rs. 550, instead of the previous fee of Rs. 750. Furthermore, Investor Account custody fee has also been reduced by over 11 percent.

This move will boost the resolve of Capital Market investors to keep their securities safe and secured with CDC’s Investor Account. The IAS Account offers investors direct access to their securities, and is directly operated by CDC on their instructions.

Investor Account holders are also offered free value added services that include comprehensive web access, eAlerts, SMS alerts, IVR, online transactions through web portal and mobile application.