Chapter N0 1.

1-Who is an Investor?
If you invest in Securities (Shares/Debenture), you are investor.
2-May I be participant?
No. Brokers/Financial Institutions are participant.
3-Who open Sub Account?
Participant opens on behalf of client. Suppose you are Uzair, and Jhanghir Sidddiqui
is the broker. Jhanghair Siddiqui open accounts on your behalf. In sub account no
direct access to investor.
Chapter No. 2
1 - What is Investor Account Services (IAS)?
Investor Account Services allows retail investors to directly open and maintain
accounts in Central Depository System (CDS) for safe custody and electronic
settlement of securities. Earlier, to settle the securities through CDS, investors had
to open client accounts (sub accounts) with the CDS Participants (brokers & financial
institutions). With Investor Account Services, investors can now have direct access
to their account.

2 - What is an Investor Account and how is it different from a Sub Account?

Investor Account, like sub account, is an electronic account in which investors can
keep their book entry securities. Investor Accounts are under complete control of
CDC and are operated on direct written instruction of the Investor Account Holders.
Sub Accounts, on the other hand, are maintained and operated by CDC Participants
(third party) on behalf of the sub account holders. In short, CDC directly controls
Investor Accounts whereas sub accounts are controlled by CDC Participants.

3 - What are the benefits of IAS?

Investor accounts are safe and secure as they are directly maintained by CDC
Investor Accounts are operated directly and only on written instructions of
investor(s). Therefore, investors have direct and complete control over their bookentry securities Account balance and other information is available through CDC
access Interactive Voice Response (IVR), Web service and SMS alerts.

4 - Who can open an Investor Account?

The following are eligible to open Investor Account with CDC: 1. Individuals
(Pakistani nationals as well as foreigners) who; are not minor are of sound mind
have not applied to be adjudicated as an insolvent, have not suspended payments
and have not compounded with their creditors are not undischarged insolvent. 2.
Other than Individuals such as corporate entities, societies etc.

5 - How can I open an Investor Account?

To open an Investor account, you need to fill out the Investor Account Opening
Form, which can be obtained from the CDC Investor Account Services department
located in Karachi, Lahore and Islamabad. The form can also be downloaded from
the CDC Website (www.cdcpakistan.com) or through written request or by calling
CDC Customer Support Services at 0800 CDCPL (23275).* You are required to
submit the application form along with the other required documents. Once your
account has been opened you will be provided with an Account Opening Package.
Physical presence along with the original CNIC of the Account Holder and Joint
Account Holders, if any, is necessary at the time of account opening for residents of
the cities where CDC offices are present. In other cases, the copy (ies) of CNIC (s)
being submitted must be signed by the manager of any Commercial Bank or by the
nearest embassy in case of Non-Resident Pakistanis and Foreigners. * For overseas
callers: +9221-34326038

6 - What are the contents of Account Opening Package?

Account Opening Package provided on opening an Investor Account includes the
following items: Transaction Order (T.O.) Book Account Setup Detail (registration
details) CDC access IVR and Web User Guides / Flyers and SMS CDC access
Registration Form.

7 - How long does it take to open an Investor Account?

Individual accounts are opened within 24 hours whereas corporate accounts are
opened within 48 hours (Incase of cheque, the account will be opened after its
clearance) after which you can start using the services of IAS.

8 - How many persons can jointly open an Investor Account?

As many as four persons can jointly open an account. Once the account is opened,
the joint account holders can neither be added nor removed.

9 - What services / functionalities can I avail through IAS?

You can avail the following services: Receipt and delivery of book entry securities
(settlement of book entry securities) Subscription of securities directly through the
Investor Account Credit / Receipt of any corporate action on the securities
Account Balance Statement on quarterly basis Account Balances and Activity
Report available round-the-clock through CDC access IVR and Web services
(registration required) Deposit of securities into CDS Withdrawal of securities
from CDS Pledging of securities

10 - How to deposit securities through Investor Account?

For conversion of physical securities into electronic book entry securities, the clients
are required to submit Securities Deposit Form (SDF) along with security certificates
& verified transfer deeds bearing share transfer stamp to front desk of IAS
department. IAS sends these certificates & transfer deeds along with a copy of SDF
to the respective Issuer or Registrar / Transfer Agent (R/TA) and simultaneously
places a deposit request from the concerned Investor Account on behalf of the
account holder. After completing verification process, the Issuer / R/TA accepts or
rejects the request and only in case of acceptance, the securities are credited to the
respective Investor Account. The security certificates can also be deposited through
Participants and are transferred subsequently to your account in IAS on your
instructions to the Participant. Only those securities certificates can be deposited in
an Investor Account which are beneficially owned by the Investor Account Holder(s).
11 - How can I carry out deliveries in Investor Account?
DELIVERY OUT: You are required to fill out the Transaction Order (T.O.) Leaf
(maximum 3 securities per T.O.) and submit it at the front desk of IAS department at
any of the designated CDC branches. Make sure you mention the complete names
of the securities in the T.O. You also need to ensure that your account has sufficient
available balance of each security you want to transact, as well as the cash required
to cover the transaction cost (in case of insufficient balance you need to deposit the
required amount). Partial transaction cannot be carried out on a T.O. DELIVERY IN:
You need to provide your Investor Account Number to the Participant in order to
transfer securities in your Investor Account.

12 - Can I subscribe securities in my Investor Account?

Yes, you can conveniently subscribe your securities only in your own / joint investor
account by providing your account number and IAS ID in the shares subscription
form. Having securities subscribed in your investor account, you can get instant
credit of securities without any delay.

13 - How can I pledge securities through my Investor Account?

In order to pledge your securities, you need to fill out the Securities Pledge Form
and submit it at the front desk of IAS department. You can only pledge securities in
favor of Pledgees having accounts in CDS as Eligible Pledgees (list of Eligible
Pledgees is available at the CDC Customer Support Counters and also on CDC
website www.cdcpakistan.com).

14 - Can I get my securities converted back into physical form?

Yes, you can withdraw securities from Central Depository System, for which you
need to fill out the Securities Withdrawal Form, affix transfer stamps as per the
prevailing rate and submit it at the front desk of IAS department. Withdrawal
request along with relevant documents is sent to respective issuer / R/TA and the
physical certificates are to be received from the issuer/ R/TA directly.

15 - Can another person execute transactions on my behalf?

Yes, a person authorized by you as your agent can operate your account on your
behalf. However, you have to submit a power of attorney authorizing the relevant
person to operate the account on your behalf along with his / her specimen
signatures. Please note that only one Attorney at a time can be appointed in an
Investor Account.

16 - How can I close my Investor Account?

To close an Investor Account, you have to intimate CDC through Account Closing
Request Form. The account will not be closed in the following circumstances: If the
cash or security balance of your account is not zero (you either move out securities
or withdraw the balance). If there is any pending corporate action awaiting credit
in your account. If there is a pending deposit or withdrawal request. In case of
cash balance, you can deposit / claim the balance, as the case may be.

17 - Can I operate my account without visiting IAS counter?

Yes, you can operate your account in 2 ways: Either mail the T.O to CDC Or send
the T.O through another person to CDC to carryout the transaction on your behalf.

18 - How can I update my registration details?

You can intimate CDC in writing about the changes in your registration details. This
letter can either be mailed to CDC or delivered in person. CDC will send you a
confirmation after the changes have been incorporated in your registration details.

19 - How much earlier should I make the payment through cheque?

You can make payments through cheque in favor of the Central Depository
Company of Pakistan Limited. You just need to ensure that the cheque is submitted
well in time before the settlement date, as it normally needs 2 days for clearance.

20 - Is Investor account used for cash deposit as well?

No, Investor Account cannot be used to deposit cash. However, IAS does maintain a
cash account for its account holder so as to have sufficient cash available that is
required (as per tariff structure) to execute the transaction.

21 - What is the importance of registration details?

Your registration details such as your account title, address, joint holder details and
Zakat Status, etc. are very important as these are passed on to the Issuers / R/TAs
for correspondence and disbursement of corporate benefits. Therefore, it is not only
important to fill out the details properly but also to intimate the changes (if any) in
these details immediately.

22 - How can I make payment to IAS?

You have the following payment options available: Lump Sum Payment: You can
deposit cash in advance with CDC. Upon execution of each transaction, required
amount is deducted from the deposit. You do not have to deposit the required
amount with every transaction. Direct Payment, In this case, you deposit the
required amount at the time of submission of relevant transaction order (T/O).
Either you can deposit yourself or your agent can perform the same on your behalf.

Following modes of payment are available to you: Cash (amount less than Rs.
5,000) Demand Draft / Pay Order Cheque (subject to clearance

1 - What is Central Depository System?

CDS is an Electronic Book Entry System: To record & maintain securities To
register transfer of securities. The system changes the ownership of securities
without any physical movement /endorsement of certificates & execution of transfer
instruments.

2 - What are CDS Elements?

There are three Elements of CDS namely: Account Holders Issuers/R/TA Eligible
Pledgees. These Elements have a defined role in the Central Depository System as
the system is driven by them without direct involvement of CDC on day-to-day
basis.

3 - What is meant by Account Holder?

Account Holders are divided into two categories; Account Holders and Participants.
Both, Account Holders and Participants have direct access to CDS. Account Holders
are only allowed to keep their beneficially owned securities whereas Participants, in
addition to maintaining their beneficially owned securities, are entitled to open SubAccounts in CDS in order to further provide custody services to their clients.

4 - Who can become Account Holder/Participant in CDS?

Members of Stock Exchanges (for Corporate Member, standard custody clause in
Memorandum of Association is mandatory), Commercial Banks, Modarabas and
Developmental Financial Institutions can become Participant. Whereas, all entities
(Private and Public) can be admitted as Account Holder.

5 - Who is an Issuer?
The companies whose securities (both equity and debt) are inducted in CDS
(directly in book entry form or by the way of physical deposit of securities) are
called Issuers. Issuer may appoint the R/TA (Registrar/Transfer Agent) to perform its
obligations or take action on its behalf. The Issuers/R/TA of capital also have direct
access to the CDS. Once a security is declared eligible and becomes 'live' for the

purposes of CDS, the necessary software and connection are provided to the Issuer
of that particular security. The physical securities are converted into electronic
book-entry securities only after proper verification by these Issuers or appointed
R/TA. This process eliminates the problems of forged, duplicate, damaged or lost
certificates as securities are thoroughly checked by the Issuers/R/TA before approval
for CDS.

6 - Who is an R/TA?
An R/TA (Registrar/Transfer Agent) may be appointed by an Issuer of Security to
perform its obligations or take action on its behalf. The R/TA should be a company
formed and registered under the Companies Ordinance, 1984 (Refer rule 4 of the
Balloters, Transfer Agents and Underwriters Rules, 2001). Such appointments are
required to be notified to the CDC (Refer CDC Regulations no 5.6.1).

7- When is it mandatory to acquire the services of independent R/TA?

Issuers who are also maintaining Account Holder/Participant account in CDS are
required to outsource their R/TA function to an independent R/TA. Further, as per
section 204A of the Companies Ordinance, 1984, all listed companies [whether they
maintain an Account Holder/Participant Account or not] are required to appoint an
independent R/TA. (Refer CDC Regulation # 8.11)

8 - Who is an Eligible Pledgee?

Any Company, Corporation or Institution such as Banks / Financial Institutions /
Development Financial Institutions that are authorized to provide financing against
securities can join CDC in the capacity of Eligible Pledgees. Further, Stock
Exchanges / Clearing Companies can also join CDC in the capacity of Eligible
Pledgees for risk management purpose.

9 - Who can request CDC to open their Margin Trading (MT) Account in CDS?
CDS Participants / Account Holders who have been admitted as Trading Financiers
by NCCPL can request CDC to open their MT Account.

10 - Who can request CDC to open Margin Financing (MF) Account in CDS?

CDS Participants / Account Holders who have been admitted as Eligible Financiers
by NCCPL can request CDC to open their MF Account.
1 - Which Transactions are supported by CDS?
Deposit Withdrawal Free Delivery Pledge Pledge Release Pledge Call
Corporate Action IPO Settlement of Securities

12 - What is meant by Deposit?

Deposit transaction is a series of actions through which physical certificates are
converted into electronic book entry securities in CDS. The deposit request
transaction is initiated by Account Holder/Participants in CDS either on their own or
on behalf of their client.

13 - Can I deposit the securities in CDS which are not registered in my name?
No, deposit of securities into the Central Depository System (CDS) that are not
beneficially owned by the relevant account holder is prohibited. Therefore, no
deposit request transaction should be made by the Account Holder/Participant
unless the underlying securities are already registered in the name of the Title of
account or in the name of joint account holder. (Refer CDC Regulation # 8.1.2)

14 - What is meant by Withdrawal?

Securities can be withdrawn in the form of physical certificates from CDS through
withdrawal transaction. This facility is provided to cater those account holders who
prefer to keep physical security certificates. The withdrawal request transaction is
initiated by Account Holder/Participants in CDS either on their own or on behalf of
their client.

15 - What is meant by Free Delivery?

The term 'Free Delivery' applies to all book-entry delivery of securities, as it takes
place without any corresponding movement of cash in the system. Once the
securities are Deposited/Credited in CDS, they become available for delivery from
one CDS account to another. If transfer of securities is within the account family of a
Participant, it is called an Intra-Account Free Delivery. Similarly, if securities are
transferred from one Participants sub-account/house or IAS account to another subaccount/house or IAS account held under the umbrella of another Participant, the

transaction is called an Inter-Participant Free Delivery. Each Free Delivery

transaction is backed by Reason Code, which is associated with the nature of each
transaction executed.

16 - What is meant by Pledge in CDS?

An Account Holder/Participant, acting either on his own behalf or on behalf of his
client, can place securities under pledge in favour of an Eligible Pledgee. Placing
securities under pledge results in the securities being flagged as no longer available
for transactions by the shareholder until released from pledge. The beneficial owner
however continues to get the corporate entitlements on flagged securities.

17 - What is meant by Pledge Release?

Eligible Pledgees can release securities, which have been placed under pledge in
their favour. As soon as securities are released from pledge, they become available
to the Pledgor (beneficial owner) for further transactions such as movement of
securities, withdrawal or another pledge.

18 - What is meant by Pledge Call?

Eligible Pledgees have the option of calling/transfer pledged securities in their own
account or in any other account in CDS (if required).

19 - How Corporate Actions are handled through CDS?

Shareholders entitlements like Bonus, Letter of Rights, etc. announced by the Issuer
of Securities are directly credited to the respective accounts on the basis of the list
of beneficial owners provided by CDC. CDS also facilitates the process of Merger,
De-merger and Consolidation / Sub-Division in an efficient manner. Further, CDC
provides the entitlement report to the Issuer / R/TA for the processing of cash
dividends.

20 - How are New Issue/IPOs/Further Issue/Right Issue handled through CDS?

Upon completion of formalities of CDC Admission by the Issuer in the Central
Depository System, securities can be directly credited into the subscribers CDS
accounts by uploading the details of successful applicants into the CDS. In this

manner Account Holders can avoid the hassle involved in obtaining physical
certificates and then converting them into electronic form.
21 - When should the Issuer/RTA intimate CDC about the Book Closure?
Issuer of Eligible Security is required to notify CDC the Book Closure period at least
7 business days before the Book Closure Start Date. (Refer CDC Regulation # 12.1)

22 - When should the Issuer/RTA intimate CDC about the General/Review Meeting?
Issuer of Eligible Security is required to notify CDC 7 business days before General
Meeting for printing & sending the Statutory Notices to the shareholders.

23 - What is the purpose of R/TA Reconciliation?

In order to ensure that no discrepancy exists between Central Depository Register
(CDR) and the Members Register (or register or holder of other securities of the
Issuer), Issuers / R/TAs are required to reconcile the number of Book-Entry Securities
held in the CDR with the number of Securities recorded in the name of CDC on the
books of the Issuer from time to time, but at least once in a month.

24 - When should Issuer/RTA submit the R/TA Reconciliation Report to CDC?

Issuers / R/TA are required to submit RTA Reconciliation statement twice during a
year to CDC on: ? Half Yearly Basis Not later than 10th Business Day at the end of
six months. ? Yearly Basis Latest by the end of 4th month from the end of the
financial year. This report also needs to be authenticated by the External Auditor of
the Issuer. (Refer CDC Regulation # 13.7.1)

25 - What if the Issuer/ R/TA does not provide the R/TA Reconciliation on the
specified time?
In case the Issuer commits a breach of the requirement, a fine upto Rs. 10,000
(Rupees ten thousand) may be imposed. Where the breach continues, further
regulatory action may be initiated against the non-compliant Issuer. (Refer CDC
Regulation # 13.7.1B)

26 - Can CDS elements login to CDS using any PC?

No, Elements terminals are binded with CDS as a security measure through their
MAC/Hard Disk address [provided to CDC at the time of installation/reinstallation]
and Elements can login to CDS only through their binded terminals.

27 - What is the Global Terminal Facility?

For the benefit of its clients, CDC has provided computer terminals at its premises to
be operated by clients (all CDS Elements) in case of any technical problem at their
end.

28 - How can I use Global Terminal Facility?

To avail the Global Terminal Facility, the designated user representing the CDS
Element is required to bring the following: 1. Duly filled GTF Usage Form bearing
company / business stamp duly signed by the authorized signatory(ies) in original 2.
Original CNIC of the designated user as well as a copy which will be retained by CDC
for its record. 3. Assigned R/SA token to logon to CDS through the global terminal.
Printing of reports is not allowed to clients from Global Terminal. However, a
download facility on clients USB is allowed.

29 - Which service requests can CDS Elements make through CDC access IVR and
Web?
CDC access IVR and Web provide CDS Elements the facility to make the requests for
CDS Password Reset, CDS Reinstallation, CDS Offline Data, Change of CDS Access
Policy Option and Billing Invoice.

30 - What if I wish to use CDS on more than one terminal?

Elements may request CDC for the installation of an Additional CDS Terminal. The
connectivity charges are Rs. 10,000/- per month for each additional terminal along
with the annual RSA Token Device charges.
31 - How can Elements connect to CDS?
There are three options through which Elements can connect to CDS: 1. LAN
(Available at Stock Exchanges) 2. Multinet 3. Dial-up

32 - Can Dial-in users connect to CDS by using any telephone numbers?

No, CLI (Caller Line Identification) is a security feature in CDS for Dial-up Users
implemented to enhance system integrity. With CLI, the Element using its Dial-up
User ID is tagged to maximum of two digital telephone numbers. The CDS Dial-up
Element can only connect through these tagged numbers.

33 - What is CDS User Access Policy Option?

CDS User Access Policy offers CDS Elements different options for segregating their
user level authorities. Elements should choose appropriate option according to their
need and give post mode authorities to relatively senior personnel.

34 - Can I use internet on the same PC which I am using for CDS?

No, in order to achieve maximum security and performance, the Element must
ensure that the PC must be exclusively used only for CDC applications. Internet
usage on the same PC is strongly discouraged.

1 - How do I get the physical shares transferred in my name?

Share certificate with verified transfer deed along with copy of CNIC are required
to be submitted with respective Share Registrar. Purchaser / buyer / transferee will
fill his / her particulars in relevant columns of transfer deed and sign. Transferee
signature must be witnessed Transfer duty is to be affixed on the reverse of
transfer deed in form of share transfer stamps. Transfer duty is to be affixed @ 1.5
% of the face value of shares. Share certificates lodged for transfer are ready for
delivery / dispatch within 45 days.

2 - Why and how do I get my signature verified on a transfer deed?

Shareholder is requested to get the transfer deed verified by respective Share
Registrar to make his/her physical shares saleable or convertible in book entry form.
Shareholder sends his / her filled, signed and witnessed transfer deed to
respective Share Registrar through mail or on service counters to make his / her
physical shares saleable or convertible in book entry form Transferors columns of
transfer deed will be filled by shareholder. Transfer Deed will be verified within 48
hours. At service counters transfer deed is verified on presentation.

3 - If my transfer deed is misplaced or lost, what formalities do I need to follow?

 In case of loss / misplacement of verified transfer deed, formalities such as

submission of signed request letter, indemnity bond, copies of CNIC of
applicant/guarantor/witnessing persons and other requirements depending upon
case to case basis are to be fulfilled by Shareholder for verification of duplicate
transfer deed.

4 - How do I get my physical shares converted into electronic shares?

Shareholder must open an account in CDS with any CDC Participant (Stock Broker)
or with CDC Investors Account Services (IAS) CDC Participant (Stock Broker) or
CDC IAS Deposit Section initiates deposit request in CDS on behalf of shareholder.
CDC Participant (Stock Broker) or CDC IAS Deposit Section sends physical share
certificate, verified transfer deed, duly filled and signed security deposit form and
CDS deposit request printout (obtained after initiating deposit request in CDS) to
respective Share. For deposit, transfer duty is to be affixed on the reverse of
transfer deed in form of share transfer stamps. Transfer duty is to be affixed @ 0.1
% of the face value of shares. Share Registrar after verifying the documents gives
approval of deposit in CDS within 5 days.

5 - How do I get my electronic shares converted into physical shares?

CDC Participant (Stock Broker) or CDC IAS Deposit Section initiates withdrawal
request in CDS on behalf of the shareholder. CDC Participant (Stock Broker) or CDC
IAS Deposit Section sends Security Withdrawal Form (SWF) and CDS Withdrawal
Request printout (obtained after initiating withdrawal request in CDS) to Share
Registrar. SWF is also filled and signed by withdrawing shareholder. Transfer duty
is to be affixed on the reverse of SWF in form of share transfer stamps @ 1.5 % of
the face value of shares. Withdrawal request lodged for conversion of shares from
book entry form to physical form is approved by Share Registrar in CDS within 5
days. Physical share certificates are prepared and delivered / dispatched to
shareholder within 45 days.

6 - If my share certificates are lost or misplaced, how do I get duplicates of the

same?
Shareholder will immediately inform Share Registrar in writing (signed letter)
about lost / misplacement. Share Registrar will let him / her know about necessary
formalities (such as submission of indemnity bond, newspaper publication, copies of
CNIC of applicant/guarantor/witnessing persons and other requirements depending
upon case to case basis which are to be fulfilled by the Shareholder) Duplicate

share certificates will be prepared and issued within 45 days after completion of
above mentioned formalities by the shareholder.

7 - How do I get my contact details changed?

In case of change in personal registration details (such as address, name, bank
mandate, etc.) shareholder will send letter to Share Registrar duly signed
mentioning new address to note in records and to update his /her particulars in
Members Register. In the event where shares are in electronic form, CDS account
holders would write to his/her CDC participant (Stock Broker) or CDC Investor
Account Services as the case maybe.

8 - How do I get my cash dividend or bonus share certificates?

Cash dividend warrants are sent to the shareholders (physical and CDS) by
registered post on their registered addresses or to their bankers (in case of bank
mandate) Physical bonus share certificates are sent to shareholders on their
registered address through registered post. In case of electronic shares the
dividend or bonus shares will be deposited directly into the CDC participant (Stock
Broker) or Investor Account maintained at CDC.

9 - What is the course of action if cash dividend or bonus share certificates are not
received?
In case of non-receipt or loss/misplacement of dividend warrant or bonus share
certificates in transit, shareholder may get duplicates by sending written and signed
request to Share Registrar and completion of necessary formalities required by
Share Registrar such as submission of indemnity bond, copies of CNIC of
applicant/guarantor/witnessing persons and other requirements depending upon
case to case basis are to be fulfilled by Shareholder. CDS shareholders get direct
credit of bonus shares in their respective CDS accounts.

10 - What are the contact details of CDC Share Registrar Services?

Karachi Office:Share Registrar Department, Central Depository Company of
Pakistan Limited, Head Office, CDC House, 99-B, Block B, S.M.C.H.S., Main Sharea
Faisal, Karachi-74400. Tel: Customer Support Services (Toll Free) 0800-CDCPL
(23275) Fax (92-21) 34326053. Lahore Office:Central Depository Company of
Pakistan Limited, 2nd Floor, 307 - Upper Mall, Lahore 54000 Tel: (0092-42)
35789378 87 Fax: (0092-42) 35789340. Islamabad Office:Central Depository

Company of Pakistan Limited, Room # 410, 4th floor, ISE Towers, 55-B, Jinnah
Avenue, Blue Area Islamabad. Telephone # (0092-51) -2895456-59 Fax # (0092-51)
- 2895454. Email: info@cdcpak.com Website: www.cdcpakistan.com Public dealing
timings at counters: Monday to Friday - From 9:00 a.m. to 1:00 p.m. and 2:30 p.m.
to 4:30 p.m. Share Registrar Services counter dealing is also available on Saturdays
from 9:00 a.m. to 1:00 p.m. Shareholders may send signed requests through post
(mail) or come to the counters for their shares related inquiries / transactions.