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.
“We have asked share registrars of listed companies in writing to persuade their clients to get their shares dematerialised,” said CEO of CDSC Subodh Sharma Sigdel. At present, there are 13 merchant banking firms that are licensed to undertake the job of registering and transferring agents of securities.
Share registrars are firms that keep records of shareholders on behalf of public limited companies and transfer the share ownership following trading. “Since these companies can explain the importance of dematerialised shares to listed firms we have sought their help,” pointed out Sigdel.
CDSC undertakes clearing and settlement of traded dematerialised shares electronically so post trading duration will diminish dramatically. At present, it takes buyers more than one month to get certificates of the purchased shares.
Moreover, it will also remove the necessity to print share certificates, thus reducing the cost for the issuing companies.
“Likewise, we have also written a letter to issuers seeking an explanation as to why they did not get their shares dematerialised by the earlier announced deadline of July 15,” said Sigdel.
In the beginning of last fiscal year, CDSC had announced its official opening and according to regulation, companies had to get their shares dematerialised within one year. With a year gone by, there were only 12 listed companies that had dematerialised shares by the deadline.
CDSC does not have the authority to impose any kind of penalty or to refuse dematerialisation of shares past the due date.
Brokers are also apprehensive of taking up the job of clearing members. But CDSC is supposed to have cleared the disagreements with brokers. It has agreed to accept bank guarantee on behalf of brokerage firms to cover cases of default or delay on settlements instead of cash guarantee.
Clearing members are brokers who electronically transfer dematerialised shares belonging to investors stored in demat account at depository participants.
src THT
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.
“We have asked share registrars of listed companies in writing to persuade their clients to get their shares dematerialised,” said CEO of CDSC Subodh Sharma Sigdel. At present, there are 13 merchant banking firms that are licensed to undertake the job of registering and transferring agents of securities.
Share registrars are firms that keep records of shareholders on behalf of public limited companies and transfer the share ownership following trading. “Since these companies can explain the importance of dematerialised shares to listed firms we have sought their help,” pointed out Sigdel.
CDSC undertakes clearing and settlement of traded dematerialised shares electronically so post trading duration will diminish dramatically. At present, it takes buyers more than one month to get certificates of the purchased shares.
Moreover, it will also remove the necessity to print share certificates, thus reducing the cost for the issuing companies.
“Likewise, we have also written a letter to issuers seeking an explanation as to why they did not get their shares dematerialised by the earlier announced deadline of July 15,” said Sigdel.
In the beginning of last fiscal year, CDSC had announced its official opening and according to regulation, companies had to get their shares dematerialised within one year. With a year gone by, there were only 12 listed companies that had dematerialised shares by the deadline.
CDSC does not have the authority to impose any kind of penalty or to refuse dematerialisation of shares past the due date.
Brokers are also apprehensive of taking up the job of clearing members. But CDSC is supposed to have cleared the disagreements with brokers. It has agreed to accept bank guarantee on behalf of brokerage firms to cover cases of default or delay on settlements instead of cash guarantee.
Clearing members are brokers who electronically transfer dematerialised shares belonging to investors stored in demat account at depository participants.
src THT
