Kathmandu, May 13
The Central Depository System (CDS) and Clearing Company Ltd., the subsidiary company of the Nepal Stock Exchange Limited (NEPSE), has planned to tender business permission to the Civil Capital Market and ACE Capital as depository participants (DPs) within a week.
As the Civil Capital and Ace Capital got licenses from the Security Board of Nepal (SEBON), the regulatory authority of the capital market, to operate their businesses as DPs, the CDS has planned to allow them to work as its agents.
Only two companies out of around one dozen have got silences as DPs from SEBON.
Talking to The Rising Nepal, Subod Sharma Sigdel, Chief Executive Officer (CEO) at the CDS Company, said that CDS had planned to tender the permission to Civil Capital within some days, while ACE Capital would get permission soon after it manages required infrastructure prescribed by CDS.
Sharma, however, said that the operation of the CDS could take longer time as no listed companies have enlisted in the company, so far.
"Though we are ready to operate transactions, the operation would not be possible unless the issuer companies do not come under the registration of CDS and shareholders open their dematerialized accounts at CDS," he said.
He informed that five companies from the banking, finance and insurance companies have assured of enlisting at CDS soon.
As the current fiscal year is about to end, issuer companies may come into operation only after the completion of the fiscal year to avoid annual registration fees, he said.
He said that the CDS and Clearing Company would come into operation if some companies are registered. Two DPs would be sufficient to come into operation in the initial stage, he added.
To encourage issuers to be enlisted within the current fiscal year, we have proposed SEBON to reduce registration fees, he informed.
Similarly, our business development team is organizing a door to door marketing for attracting issuers to come under CDS system, he said.
Likewise, we are also organizing a discussion programmes on Monday with the listed companies regarding the operation of CDS and its importance to such companies, he said.
As there is a provision of one year’s time to come for registration to issuers, listed companies have shown reluctance to come under CDS earlier, he said.
As per the regulation, the listed companies need to come under CDS by January 2013.