Buyers to get shares on demat format from Ashoj 20 : CDSCL

Investors having the securities on the physical format can sell their scrips while the buyers buying the shares on whatever format will, however, get the shares on the demat format with the paper-less trading coming into operation from Ashoj 20.

Nepse to operate full-fledged CDSC by Kartik 6

Nepal Stock Exchange (Nepse) has yet again come up with an ultimatum to the listed companies to get the memership of the CDS and Clearing Ltd.

The Nepse, in its statement issued yesterday, warned the companies to get their shares dematerialized within 21 days. The stock exchange has said that it will take action to those companies who fail to abide by its diktat.

Register with CDS or get delisted: Nepse tells companies

Nepal Stock Exchange (Nepse) has given listed companies a month-long ultimatum to register with Central Depository System and Clearing Ltd (CDSCL) or face consequences.

CDSCL is a subsidiary of Nepse that provides one-window service for centralized depository, clearing and settlement services in the capital market. It acts as a central depository for various instruments (equity, bonds, and warrants etc) especially to handle securities in dematerialized form without physical movements of securities or execution of transfer.

NEPSE investors- Get Demat account from CDSC for digital clearing & settlement of stock transaction

CDS and Clearing (CDSC), a subsidiary of the Nepal Stock Exchange (Nepse), officially started clearing and settlement of securities transactions digitally. The paperless system allows processing to be done in an easier and faster way. While the manual system used to take at least three days to transfer ownership of shares after a sale, the central depository system (CDS) does it instantly.

According to CDSC, the 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 (electronic) form. Under the new provision, stock ownership has to be first converted into Demat format.
A Demat account can be opened through Depository Participant (DP), an agent appointed by the CDSC.

List of Licensed Depository Participants 

- Civil Capital Market Ltd. 

-ACE Capital Ltd. 

-Stock Management & DP Ltd. 

-Nabil Investment Banking Ltd. 

-NIBL Capital Markets Ltd.

-Laxmi Capital Ltd. 

-Everest Bank Limited 

-Siddhartha Capital Limited 

-NMB Capital Limited 

-Bank of Kathmandu Limited 

 Similarly, the companies listed on Nepse also have to open a Demat account with CDSC. Potential investors, after being okayed for a Demat account, can post the number of shares they want to buy or sell through their brokers.
According to CDSC company secretary Subodh Dhungel, the should enter the assigned number of shares in “Pull Account” through which trading is done. Investors are required to pay Rs 50 to open a Demat account and an annual fee of Rs 100. “Other processing costs are born by the concerned companies,” said Dhungel.
Under the new system, brokers also have to become members of CDSC to act on behalf of their clients.

List of Registered Clearing Members

S.No.	Clearing Members	CM No.
1	ABC Securities Pvt. Ltd.	17
2	Agrawal Securities Pvt. Ltd.	6
3	Arun Securities Pvt. Ltd.	3
4	Aryatara Investment & Securities Pvt. Ltd.	57
5	Ashutosh Brokerage & Securities Pvt. Ltd.	8
6	Asian Securities Pvt. Limited	26
7	Bhrikuti Stock Broking Co. Pvt. Ltd.	55
8	Creative Securities Pvt. Ltd.	40
9	Crystal Kanchanjunga Securities Pvt. Ltd.	50
10	Dakshinkali Investment & Securities Pvt. Ltd.	33
11	Dipshika Dhitopatra Karobar Co. Pvt. Ltd.	38
12	Divyaa Securities & Stock House Pvt. Ltd.	59
13	Imperial Securities Co. Pvt. Ltd.	45
14	Investment Management Nepal Pvt. Ltd.	53
15	J.F. Securities Company Pvt. Ltd.	7
16	Kalika Securities Pvt. Ltd.	46
17	Kumari Securities Pvt. Ltd.	1
18	Kohinoor Investment And Securities Pvt. Ltd.	35
19	Linch Stock Market Ltd.	41
20	Malla & Malla Stock Broking Company Pvt. Ltd.	11
21	Market Securities Exchange Co. Pvt. Ltd.	5
22	Midas Stock Broking Company Pvt. Limited	21
23	Nasa Securities Co. Ltd.	58
24	Nepal Investment & Securities Trading Pvt. Ltd.	19
25	Nepal Stock House Pvt. Ltd.	14
26	Online Securities Pvt. Ltd.	49
27	Opal Securities Investment Pvt. Ltd.	4
28	Oxford Securities Pvt. Ltd.	51
29	Pragyan Securities Pvt. Ltd.	10
30	Premier Securities Company Limited	32
31	Primo Securities Pvt. Ltd.	16
32	Sagarmatha Securities Pvt. Limited	18
33	Sani Securities Co. Ltd.	42
34	Sewa Securities Pvt. Ltd.	54
35	Shree Krishna Securities Ltd.	28
36	Sipla Securities Pvt. Ltd.	20
37	Siprabi Securities Pvt. Limited	22
38	South Asian Bulls Pvt. Ltd.	43
39	Sundhara Securities Ltd.	56
40	Sweta Securities Pvt. Ltd.	25
41	Thrive Brokerage House Pvt. Limited	13
42	Trishakti Securities Public Pvt. Ltd.	48
43	Trisul Securities & Investment Ltd.	29
44	Vision Securities Pvt. Ltd.	34
45	Neev Securities Pvt. Ltd.	47
46	Dynamic Money Managers Securities Pvt. Ltd.	44
47	Secured Securities Ltd.	36
48	Sri Hari Securities Pvt. Ltd.	56
49	Sumeru Securities Pvt. Ltd.	39
50	Swarnalaxmi Securities Pvt. Ltd.	37

Other companies which have obtained a license from the Securities Board of Nepal (Sebon) can also perform the clearing function of stock transactions. The new provision is expected to minimise hassles for investors while buying and selling stocks. The system also makes it easier to acquire rights shares issued by the companies concerned.
“The new system allows traders to do multiple transaction on the same day,” said Dhungel. According to him, investors can also buy and sell shares in small quantities.
All the listed companies will have to open a Demat account at CDSC.

List of Registered Companies 

S.No.	Company	ISIN
1	ACE Development Bank Ltd.	NPE000A00007
2	Agricultural Development Bank	NPE001A00005
3	Everest Finance Co. Ltd.	NPE002A00003
4	Bank of Kathmandu Ltd.	NPE003A00001
5	Laxmi Bank Ltd.	NPE004A00009
6	Himalayan General Insurance Co. Ltd.	NPE005A00006
7	Shikhar Insurance Co. Ltd.	NPE006A00004
8	Nepal SBI Bank Ltd.	NPE007A00002
9	Siddhartha Insurance Limited	NPE008A00000
10	Siddartha Bank Ltd.	NPE009A00008
11	PrimeLife Insurance Co. Ltd.	NPE010A00006
12	Citizens Bank International Ltd.	NPE011A00004
13	Civil Bank Ltd.	NPE012A00002
14	Nepal Bangladesh Bank Ltd.	NPE013A00000
15	Sunrise Bank Ltd.	NPE014A00008
16	Nepal Life Insurance Co. Ltd.	NPE209A00004

17	Himalayan Bank Ltd.	NPE019A00007 (Ordinary Share)                                                     NPE019A00015 (Promoter Share)

CDSC UPDATE

Registered Companies:	17
Registered Clearing Members:	50
Licensed Depository Participants:	10
Beneficial Owners' Demat Account:	624
No. of Shares in Demat Form:	179814
Companies in Pipeline for Admission of Securities:	20
DPs in Pipeline:	2
As of 2014-07-22

Brokers apply for clearing membership

With brokers applying for the clearing membership, all the components required to run a central depository system seem to be coming together. However, the ineligibility of most of the brokers to work as Depository Participant (DP) might hamper the smooth operation of CDS and Clearing Ltd (CDSC).

CDSC seeks help to pursue listed companies

CDS and Clearing Ltd (CDSC) has sought the help of share registrars to get listed companies register their shares for dematerialisation.
Since only 15 companies among the 228 listed firms have so far registered their shares for dematerialisation, CDSC has finally started to seek outside support. Despite being capable and equipped to undertake automated clearing and settlement of traded shares, CDSC has not been able to come into full operation due to the absence of all securities.

Listed company in CDSC - List

Listed company in CDSC

S.N.	Company	ISIN
1	ACE Development Bank Ltd.	NPE000A00007
2	Agricultural Development Bank	NPE001A00005
3	Everest Finance Co. Ltd.	NPE002A00003
4	Bank of Kathmandu Ltd.	NPE003A00001
5	Laxmi Bank Ltd.	NPE004A00009
6	Himalayan General Insurance Co. Ltd.	NPE005A00006
7	Shikhar Insurance Com. Ltd.	NPE006A00004
8	Nepal SBI Bank Ltd.	NPE007A00002
9	Siddhartha Insurance Limited	NPE008A00000
10	Siddartha Bank Ltd.
11	PrimeLife Insurance Co. Ltd.	NPE010A00006
12	Citizens Bank International Ltd.	NPE011A00004
13	Civil Bank Ltd.	NPE012A00002
14	Nepal Bangladesh Bank Ltd.

CDSC for bank guarantee instead of cash deposit

CDS and Clearing (CDSC), formed to carry out clearing and settlement of share trading done online, has asked the Securities Board of Nepal (Sebon) to implement a bank guarantee system instead of making a cash deposit in order to encourage more companies to become clearing members.
Currently, a company wishing to become a clearing member has to deposit Rs 1 million in cash. CDSC said the provision has discouraged companies to work as clearing members.
Only two firms have obtained licenses to become clearing members so far.
Two stockbrokers, Divya Securities & Stock House and Nepal Investment & Securities Trading, have acquired licenses to become clearing members from CDS. Usually, stockbrokers work as clearing members, and there are a total of 50 stockbrokers in Nepal.

CDS & Clearing Ltd (CDSC) & Stock Brokers resolve collateral dispute.

The need for investors to hold on to share certificates might soon be over, as CDS and Clearing Ltd (CDSC) has decided to become flexible regarding stock brokers' demand to issue them clearing membership.

CDSC's board and brokers have reached an agreement that a bank guarantee on behalf of the brokerage firms will be acceptable to cover cases of default or delay on settlements instead of cash. Brokers who are meant to be clearing members of the central depository system were not ready to undertake the role as it required them to deposit Rs one million as collateral with CDSC."

We have agreed to accept a bank guarantee instead of cash guarantee," informed CEO of CDSC Subodh Sharma Sigdel.

"Hopefully, we will see brokers taking up the clearing membership as soon as the regulator gives us a green signal to amend the provision," Sigdel added. Clearing members electronically transfer dematerialised shares belonging to investors stored in demat accounts at depository participants.

In the absence of clearing members, automatic clearing and settlement is not possible. Brokers had expressed strong objection regarding the provision that required them to deposit Rs one million in cash which would have remained idle at CDSC.

Clearing members are brokers who need to take membership from CDSC and obtain the authority to electronically transfer dematerialised shares.

"We brokers have agreed to furnish a bank guarantee to guarantee that we will not default on payments on transfer and settlement of shares traded like we do with the stock exchange," pointed out president of Stock Brokers Association of Nepal (SBAN) Narendra Raj Sijapati.

"We still have other issues but that will be addressed in the mode of operation that CDSC is preparing in association with brokers," Sijapati informed. Brokers have also expressed their displeasure regarding the provision of suspending a broker for a week if they are not able to settle the transaction on time among others.

Stock Brokers Association of Nepal and CDS and Clearing Ltd have reached the agreement in order to jumpstart CDSC's full operation that has been delayed indefinitely.

CDS and Clearing Ltd that is supposed to clear and settle shares traded at Nepal Stock Exchange has been unable to start its operation despite being fully capable.

CDS and Clearing Ltd would have been able to start operations a year back but it was unable to do so due to the absence of regulations and bylaws and also due to the lack of clearing members, registered companies and dematerialised account holders.

But more companies and investors are expected to join CDS and Clearing Ltd from the beginning of next fiscal year and once it starts operations for real.
src: tht