What is the CDC

Central Depository Company of Pakistan Limited (CDC) started in 1993 to manage and operate the Central Depository System. CDS is an electronic book entry system to record and transfer securities. Electronic book entry means that the securities do not physically change hands and the transfer from one client account to another takes place electronically. CDC is to operate as a central securities depository on behalf of the financial services industry to support an effective capital market system that will attract institutional and retail level investors from Pakistan and abroad. Its basic purpose is to operate and maintain an electronic book entry settlement system for equity, debt and other financial instruments.

Capital Markets prior to CDS

The capital markets of Pakistan have witnessed a rapid growth resulting in increased trading volume. This in turn has led to difficulty in handling the share certificates. The custody and safe keeping of physical certificates required maintenance of huge vaults by the individuals and institutions and the physical settlement of certificates were no longer feasible. Moreover, the manual system was also plagued by long delays, risks of damage and considerable time delays. Following are some highlighted problems faced before CDS was in place,


1. Increased volume of book keeping and paper work.

2. Problems in settlement due to increased volume.

3. Maintenance of huge vaults for safe keeping of certificates.

4. Long share transfer procedure taking up to 45 days.

5. Payment of stamp duty on share transfers which ranged from 0.1% to 1.5% of the face value.

6. In case of new issues the issuers would take more than 2 months for the dispatch of certificates.

7. Risks of damaged, lost, forged and duplicate certificates.

8. Capital and time investment required for issue and dispatch of share certificates, cash dividend, bonus and right issues.

Benefits after CDS was incorporated

Following are some of the benefits of electronic settlement of securities through CDS:

1. Reduced workload due to paperless settlement environment.

2. Reduced manpower requirements.

3. Instantaneous transfers of ownership.

4. No stamp duty on transfers in CDS.

5. No risk of damaged, lost, forged or duplicate certificates.

6. No impact in case of sudden increase of settlement volumes.

7. Instant credit of bonus, rights and new issues.

8. Substantial reduction of paperwork during book closure.

9. Convenient pledging of securities.

10. Substantial reduction in time & capital investments.