Kathmandu, July 2
The much-hyped Central Depository System (CDS) and Clearing Company Ltd. Will come into operation from Shrawan 1 (July 16, 2012)..
The operation of the CDS will be possible after are enlistment of five issuer companies in the CDS Company. Earlier, the CDS had rendered the transaction permission to the two depository participants- Civil Capital Market and ACE Capital as per the license provided by the Security Board of Nepal (SEBON), the regulatory authority of the Nepalese capital market.
Talking to The Rising Nepal, Subodh Sharma Sigdel, Chief Executive Officer at CDS and Clearing Company, said that it had planned to start its operation on July 16 amidst a special function. "We have requested Prime Minister Dr. Baburam Bhattarai to launch the new system," he said.
According to Sharma, five issuer companies- Shikher Insurance, Everest Bank, Lumbini General Insurance, Ace Development Bank and Agriculture Development Bank have been enlisted in CDS, so far. Additional three companies are under documentation to enlist in the CDS, he informed.
After the operation of the CDS, investors could open their d-mat account in the CDS Company to dematerialise their manual certificates of shares.
Though we are officially coming into operation from the start of the new fiscal year, its test operation will begin from the last week of the current fiscal year, he said.
For the operation of the CDS and Clearing Company Ltd., technicians from India are arriving by the last week of Shrawan, he said.
The CDS for Nepal was developed in technical assistance of Center Depositary System Ltd. India - project consultant - and vendor CMC of Tata Consultancy.
The implementation of CDS is supposed to be able to wipe out inconsistency and manipulation in stock trading making the Nepali secondary market more transparent.
But the transaction cost in the automated system is expected to be higher in comparison to the existing manual system.