CDC further slashes security deposit

KARACHI (November 13 2003): The Central Depository Company (CDC) has once again slashed the security deposit from issuers of securities by 50 percent with immediate effect.

This is the second time that CDC has reduced the said deposit during 2003. Thus, the total reduction in security deposit this year has been 75 percent.

This decision has been taken by CDC to encourage issuers to induct their securities in the Central Depository System (CDS).

The company now expects that all remaining issues would avail this opportunity to join CDS immediately.

CDC will also refund the deposit to those issuers who have already paid according to the prevailing rates prior to this announcement.

According to CDC press release, the Gazette notification of the reduction has also noted that issuers of both long-term and short-term TFCs and Wapda bonds continue to be exempt from security deposit levy.

On a separate note, CDC enhanced the custody fee on book entry securities held in group accounts from 0.045 percent to 0.10 percent per annum.

The rationale behind increase in custody fee for Group Accounts is to discourage the investors to keep their securities in Group (benami) accounts and to encourage them to open sub-accounts and investor's account to bring more transparency in the capital market.

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