Abstract:

The Evolution of the Central Depository System in Pakistan

With an ever increasing exponential growth in the Pakistan Capital Market during the early 1990s causing a huge increase in trading volumes, the physical handling of paper-based shares / certificates not only became laborious but also time consuming. It was in this perspective that CDC was incorporated to implement and operate a depository system and eliminate the tedious process of physical shares handling and transfer. The main function of CDC is to operate and maintain the Central Depository System (CDS), an electronic book-entry system used to record and maintain securities and to register the transfer of securities. The system changes the ownership of securities without any physical movement or endorsement of certificates and execution of transfer instruments. CDS facilitates equity, debt and other financial instruments in the Pakistani Capital Market. It manages Ordinary & Preference shares, TFCs, WAPDA Bonds, Sukuk, Open-End & Closed-End funds and Modaraba Certificates