Sebon likely to okay CDSL bylaws in a week
KATHAMNDU, NOV 27 -
A full-fledged operation of the much-awaited Central Depository System and Clearing Limited (CDSL) is likely to take place soon with the Securities Board of Nepal (Sebon) all set to approve its bylaws within a week.
Though three months have passed since the CDSL was established formally and all necessary infrastructure put in place, the delay in the approval of its bylaws has affected its operation.
The bylaws are important as they govern the appointment of the depository participants (DP) that de-materialises the securities deposited by the Beneficial Owner into electronic form and converts de-mated securities to physical certificates as per the instructions of the Beneficial Owner by sending them to the issuers / registrar and transfer agents.
Given the bearish run in the stock market since the past three years, the CDS that hastens clearing and settlement of stocks electronically is expected to give a boost to the market.
“We will approve the CDSL bylaws within next week once the CDSL agrees to make minor changes in the proposed bylaws,” said Niraj Giri, the director of Sebon. “We will not send back the proposed bylaws for amendment now.”
According him, Sebon will hold a meeting with the CDSL early next week and approve the bylaws with the changes. According to Sebon officials, their major concern over the bylaws is the fee structure. “We feel that the fees to be charged by the CDSL to depository participants and investors and the transaction fee is slightly high,” said Giri. “It will exacerbate the already high trading cost which might discourage investors.”
The CDSL has not disclosed the proposed fees and is waiting for Sebon’s nod to the bylaws before it makes the structure public.
CDSL Chief Executive Officer Subodh Sharma Sigdel said they are expecting an approval of the bylaws as soon as possible. “If our bylaws are approved by Sebon within next week, the CDSL will come into full operation within the next two months,” he said.
The CDSL has already put in place all necessary infrastructure with the successful completion of the final test of the software recently. “Course materials for the training for brokers and depository participants are also about to be finalised,” Sigdel said.
With the country’s only capital market still dependent on manual work when it comes to clearing and settling stocks, the need for the CDS was long felt. This CDS acts as the central depository (safekeeping, deposit and withdrawal of securities certificates and transfer of ownership/rights) for various instruments such as equity,bonds and warrants in a dematerialised form.
Source: Kantipur
