The draft of Central Depository System Regulation-2066 has set the provision of minimum paid-up capital for the Central Depository Company (CDC) at Rs 300 million.
The draft of Central Depository System Regulation-2066 has set the provision of minimum paid-up capital for the Central Depository Company (CDC) at Rs 300 million.
As per the draft, any party interested in establishing a Central Depository Company (CDC) is also required to submit a three-year business plan and operation manual.
Central Depository System (CDS) is an Electronic Book Entry System to record and maintain securities and register their transfer. In CDS, ownership will be transferred without physical movement of securities or execution of transfer deeds. Ownership will be transferred as soon as securities move from one account to another as it is purely a settlement vehicle and will not affect trading in any manner whatsoever.
“The Nepal Stock Exchange (Nepse), Citizen Investment Trust (CIT) and banks that are in operation for last five years, net worth not less than paid-up capital and earning profits for the last three years can be the shareholders of the CDC," states the draft adding, “But they should not have been blacklisted by the Credit Information Bureau (CIB),” says the draft.
The shareholders also have the lock-in period of five years.
Notably, a group of banks, Nepal Stock Exchange (Nepse), Citizen Investment Trust (CIT) and Credit Information Bureau (CIB) have already expressed their willingness in establishing Central Depository Company.
The Central Depository Company of Nepal will have 50 percent shares of Nepse, 10 percent share of CIB, 15 percent of CIT and 25 percent of a group of six promoter cum commercial banks — Standard Chartered Bank, Nabil Bank, Nepal SBI Bank, Bank of Kathmandu, Nepal Investment Bank and NIC Bank.
Apart from resulting in rise in volume and number of share transactions, the establishment of CDS can enhance liquidity by instant transfers. nepalnews.com
Read more...
