Induction of Securities into CDS
Security Induction process in CDS is divided into three major parts:
- Declaration of Securities as CDS Eligible Securities
- Set up of Securities in CDS
- Deposit or Credit of Securities into CDS
To induct a Security into CDS, it must be declared as an eligible Security for CDS first (by fulfilling the admission criteria set out in CDCPL Regulations) and then it can be inducted into CDS (made live in CDS).
Declaration of Securities as CDS Eligible Securities
As per Central Depository Company of Pakistan Limited Regulations (CDCPL Regulations), CDC may declare any Security (listed or unlisted) as an eligible Security if:
- The Issuer has the required 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.
- The Issuer is not in receivership, court-appointed manager-ship or winding up or under any equivalent form of administration.
- The declaration of the Securities as Eligible Securities would be in the public interest.
- Upon receiving the request from client, CDC provides the Eligibility requirements to the client. Once the complete Eligibility documents are received, Notice of Declaration of CDS Eligible Security is issued.
Set up of Securities in CDS
Once the Notice of declaration of CDS eligibility is issued, a Security Induction Package is sent to the Issuer. Upon receipt of this package from the issuer, CDC performs the following tasks:
- On confirmation from the Issuer regarding availability of hardware, CDS software is installed at Issuer’s / Registrar’s premises.
- A comprehensive training session is conducted to train the users of CDS. The session explains in detail the concept & workings of the CDS.
- Once the setup of the Security is done in CDS; CDS User IDs & Passwords are sent to the Issuer.
Deposit or Credit of Securities into CDS
After setting up the security in CDS, in case of New Issue, R/TA uploads the data in CDS following the Procedures for New Issue. Issuer is also required to provide the relevant documents as per the Procedures for Input of Paid-up capital/Total Issue in CDS. In case of Physical Certificates, deposit transaction will have to be initiated in CDS through CDS Participants.
For detail Induction procedure of a specific type of security kindly follow the links below: