CDSC delays electronic share transfer
KATHMANDU, JAN 11:
Investors will have to hold on to share certificates for some more time as will not be possible in the immediate future.
Nepal’s only central depository — CDS and Clearing Ltd (CDSC) — that was gearing up to start electronic clearance of traded shares by mid-January will require some more time to start its operation. CDSC which has been manually clearing and settling shares at present had planned to take on all operations by mid-January but it has some unfinished business to tend to.
“We were preparing to start electronic clearing by mid-January, but we still have to amend the clearing software and get the bylaws approved,” said CEO of CDSC Subodh Sharma Sigdel. “Moreover, our consultant — CDSL India — suggested us not to start electronic settlement in haste before being fully prepared in terms of bylaws and with regard to technology,” he added.
CDSC Bylaws 2068 is up for revision regarding the fees it is charging and responsibilities of depository participants among others. The amended bylaws are yet to be approved by Securities Board of Nepal.
CDSC’s operation is supposed to make share transfer hassle-free and swifter as it deals with dematerialised shares. The implementation of CDS is supposed do a great deal in encouraging investors as there will be hassle-free and swift ownership transfer and instant liquidity. The central depository will replace the current practice of holding and moving the scrip of quoted shares physically with electronic book entry system.
Even if CDSC starts operations, in the absence of stock exchange listed companies registered at CDSC getting their shares dematerialised, investors will not be able to reap the benefits of central depository. Among the 222 listed companies at Nepal Stock Exchange (Nepse), only five have registered their shares for dematerialisation at CDSC.
Source: THT
