CDSCL to come into operation within a week
KATHMANDU, MAY 07 -
After a long delay, the much-talked-about Central Depositary System and Clearing Limited (CDSCL) is coming into operation within a week.
The CDSCL will be awarding an operating licence to Civil Capital Market, one of
the two companies that had applied for the licence, on May 8.
“We have already assessed the infrastructural and technical capacity of the Civil Capital and we decided to award them a licence,” said Subodh Sharma Sigdel, CEO of the CDSCL.
“The officials at Civil Capital have said that they will start operation within a week after they get operating license from us.”
The CDSCL has asked Ace Capital, the other company, to prepare the infrastructural requirements for issuance of licence upon inspection.
Civil Capital Chief Executive Officer (CEO) Bishma Raj Chalise said that they would open demat accounts of the investors, starting on May 13 and to enable such investors where the share certificates of such investors would be stored in electronic forms.
The opening of demat accounts is essential for trading as it will allow transforming the physical share certificates into electronic form, leading to a hassle-free trading of shares. Once the demat accounts are created, the entire share portfolio of a shareholder is stored onto his/her demat account relieving the shareholder from the burden of keeping share certificates.
However, with many of the listed companies in Nepal Stock Exchange (Nepse) yet to be associated with CDSCL, the operation will be limited to opening of the accounts now. Dematerialising securities of the Nepse-listed companies is subject to their registeration at the CDSCL.
“Banks and financial institutions (BFIs) which dominate the capital market have shown reluctance to register themselves at CDSCL,” said Sigdel. “I think their unwillingness to register may be because they don’t want to pay a fee for the whole year with only two months left for the fiscal year.” He added that they have forwarded letter to Securities Board of Nepal (Sebon) seeking approval to scrap the annual fee for this year.
“If annual registration fee is waived, I am confident that most of the listed companies in stock exchange will register themselves with the CDSCL,” said Sigdel.
The central depository system was expected to come into operation by mid-August, but the company failed to obtain the licence from Sebon within the stipulated time. Sebon itself had cause the delay in awarding license to depositary participants.
Source: Kantipur
