CDSCL clarifies that CDS process continues smoothly
ShareSansar, October 13:
CDS and Clearing Limited has clarified that it is only planning to reschedule the CDS implementation process and the process to demat the stocks of all the listed companies was going on smoothly.
“We have not urged Sebon to postpone the implementation of CDS as some quarters are spreading rumors,” said a senior official with CDSCL. “For instance, the trading of commercial banks will continue in demat format. It is still mandatory that the buyers of the bank scrip to get the dematerialized scrip. We are still opening demat accounts for investors, signing agreement with more listed companies, Depositary Partners and other stakeholders for CDS system. It’s only that trading of all the listed companies will not be possible by from October 23 as many of them are yet to come forward for the CDS system.”
The CDSCL official further informed that they were now trying to break the process down further as per which both buying and selling of the scrips of commercial banks will be made mandatory in demat format in the second phase, which we plan to start soon, and the same will apply for other BFIs in the third phase followed by the rest of the listed companies.
“We are yet to finalize the time frame for the second, third and the end phase of CDS implementation, though,” he added. “But we have never urged Sebon to extend the next phase till the (Nepali) New Year.”
Altogether 55 listed companies have already signed an agreement with CDSCL to demat their stock while 63 more companies are in the process of doing so. The number of Depository Partners have already reached 13 and around 2,000 investors have opened the demat accounts.
Moreover, Nepal Stock Exchange Limited, had already conducted the mock trading and settlement of demat share on September 26. Altogether 2,000 transaction of three listed companies were successfully conducted to support the CDS system being implemented by its subsidiary company.
President of the Stock Brokers Association Narendra Sijapati also said that they were very much into the CDS system and that more and more brokers were joining as DPs.
Citing some media report, Nepal Investors Forum has, however, taken exception to the plan of CDSCL to delay the full-fledged implementation of CDS system.
Issuing a statement today, the Investors Forum has stated some media reports that states that CDSC has written to the Securities Board of Nepal (Sebon) to extend the deadline for full-fledged implementation of CDS system has drawn its serious attention.
As per the initial plan, CDSCL, a subsidiary of Nepal Stock Exchange Limited (Nepse) was to implement demat form of share trading of the banking group from October 8, which it has done.
According to the procedures on dematerialization of physical shares 2071 unveiled by the Nepse, the buyer clearing member should acquire the physical certificate of the shares within T+5 days after completing the settlement process within T+3 days.
The clearing member should submit the demat request form (DRF) to the CDS and Clearing Ltd (CDSCL) within T+7 days.
Once the CDSCL receives the DRF, it will submit the share certificate to the buyer clearing member within T+9 days after transferring the ownership and putting the seal of ‘Surrender for Dematerialization’.
The buyer clearing member will submit the share certificate to the respective registrar while the depository participant (DP) should collect the DRF from the CDSCL within T+10 days.
DP will have to do the entry of the information as mentioned in the DRF in the CDS. Upon the entry of the information, the DP will receive the Demat Request Number (DRN). The DP will have to submit the DRF including the DRN to the respective registrar.
The RTA will approve the certificate after verifying the DRN through the CDS on the same day or another day of receiving the share certificate and DRN on the DRF from the DP. As soon as the RTA approves, the share will be credited in the demat account of the buyers.
