Académique Documents
Professionnel Documents
Culture Documents
Depository: It is a bank or Company which holds funds or securities deposited by other, and where
exchanges of these securities take place.
Member
b) After CDC
Member Company
Stock Exchange
Buyer/ Seller
CDC
1
Security u/s. 2(24): Means, Any government Security Any derivative relating to security or a Government security; or Any other instrument specified by the Federal Government, by a notification in the official Gazette, to be a security
CDS Elements
The Elements of CDS are 1. Participants/Account-holders: Account holders are divided in two categories a. Account holder: Only allowed to keep their beneficially owned securities in CDS. Account-holder means a person who opens and maintains an account 2with a central depository and operates such account [u/s. 2(3)]. b. Participants: allowed to keep their beneficially owned securities in CDS and provide custody services to their clients as well. Participant means u/s. 2(17) An account holder who is a member 3of a stock exchange; and Any other account-holder who meets the qualifications of a participant. Provided that such account holders Perform services for sub-account holders 4in accordance with the terms of an agreement entered into between the central depository and each of the participants; Transfer any securities to the central depository to the credit of any subaccounts 5under their respective accounts; and Handle6, on behalf of sub-account holders, the book-entry securities 7in the subaccounts under their respective accounts; 2. Issuers: The companies or Issuers of capital whose securities (both equity & debt) are converted from physical to electronic securities play a significant role in CDS. The physical securities are converted into electronic book entry securities only after proper verification and approval by these issuers in CDS. The process eliminates the problem of fake certificates as securities are
Account u/s. 2(2): Means an account maintained by a central depository in the name of an account holder so as to record the title of the account-holder to any book-entry securities entered in such account; 3 Member u/s. 2(16): Includes the registered owner of any equity security of an issuer which is established under any other law; 4 Sub-Account holder u/s. 2(28): Means a person in whose name a sub-account is opened and maintained by a participant with a central depository and is operated by that participant; 5 Sub-Account u/s. 2(27): Means a sub-account maintained, as part of the account of a participant, in accordance with the regulations by a central depository in the name of a sub-account holder so as to record the title of the sub-account holder to any book-entry securities entered in such sub-account; 6 Handling u/s. 2(12): With its grammatical variations and cognate expressions, in relation or similar means, the pledging of a book-entry security in accordance with section 12 or the withdrawal from the central depository system of the security represented by the book-entry security; 7 Book-Entry Security u/s. 2(5): In relation to a central depository, means a security which is transferable by book-entry in the central depository register pursuant to a declaration made by the central depository under sub-section of section 4 and which is a. In the case of a security transferable by registration, registered in the name of the central depository or issued to the central depository pursuant to section 14; or b. In the case of a security transferable by delivery or endorsement, deposited with or transferred by endorsement to the central depository;
2
thoroughly checked by the issuers before approval for CDS. Issuer means any person, the Federal Government or a Provincial Government who or which has issued or proposes to issue any security [u/s. 2(14)] 3. Eligible Pledgees: Financial institutions that lend against securities can join CDC in the capacity of Eligible Pledgees. Eligible Pledgee means any person who, in accordance with the regulations, is recognized by a central depository as eligible for the purpose of receiving any pledge 8of book-entry securities [u/s. 2(11)]; These elements have a defined role in the Central Depository System as the system is driven by them without direct involvement of CDC on a day-to-day basis. CDC, however, keeps the system under its surveillance to ensure its smooth functioning and confidentiality.
Pledge: A bailment or delivery of personal property to a creditor as security for a debt or for the performance of an act. Something given as security for the performance of an act 9 Vest: to grant with (have) a particular right
CDS shall operate by a Central depository for holding book-entry securities as a nominee for account holders and for facilitating the transfer of such book-entry securities A Central depository may hold book-entry securities, as a beneficial owner of such securities, in its own account opened and maintained on its own central depository system.
10 11
Debenture u/s. 2(9): Includes a debenture issued by an issuer other than a company; Jumbo Certificates u/s. 2(15): Means one or more consolidated certificates of the securities of one kind or class issued by an issuer which are registered in the name of a central depository;
12 13
Tort: A civil wrong or wrongful act, whether intentional or accidental, from which injury occurs to another. Owe: Have an obligation to return, pay or repay for something received 14 Fiduciary: A person bound to act for anothers benefit, having a nature of trust. 15 Document evidencing title u/s. 2(10): Includes a. In the case of Non-Government Security, the share certificate, debenture certificate, modaraba certificate or any other certificate representing the security; and b. In the Case of Government security, such document or other evidence of title thereto as a central depository may require; 16 Information u/s. 2(13): Includes data recorded in a form which can be processed by equipment operating automatically in response to instructions given for a particular purpose;
c) All notices and other documents which an issuer is obliged or required to sent to its member or holder of any of its securities
Central Depository Register u/s. 2(7): Means a computerized electronic register maintained by a central depository in respect of book-entry securities 18 Court for the purposes of Section 11 of CDC Act: Mean the court having jurisdiction over the defendant.