To utilise the services offered by a depository, any person having investment in any security or intending to invest in securities needs to have a demat account with a CDSC-DP.
Dematerialisation is a process by which physical certificates (of shares / debentures / other securities) are converted into electronic balances.
CDSC offers a facility for transmission of balances held in BO account/s (to other BO account/s).
Generally a DP sends to the BO, a statement of his account, if required by BO, if there is any transaction in the account. The balances and transactions can also be viewed by the BOs through CDSC web based facility ‘Mero Share’.
Rematerialisation is the process by which the electronic balances held in the demat account can be converted back into physical certificates.
If the BO decides to pledge any securities in his BO account, he can avail of the same by submitting the pledge creation form duly completed, to his DP.
A depository facilitates the holding and/or transacting securities in book entry form. In other words, a depository takes the ownership guarantee of the shareholders by holding those securities and other market instruments which are listed in the secondary market, distributed or allotted and can be deposited into the electronic form. The investor has to open a demat account to avail the services of depository. Additionally, the depository maintains the record in the account of the investors.
CDS and Clearing Ltd. is the sole depository in Nepal established in 2067 B.S. under Company Act 2063 with an objective to render service of dematerialization of securities. It is wholly owned subsidiary company of Nepal Stock Exchange Ltd. (NEPSE). The authorized capital and issued capital of CDSC is NRs. 500 million and NRs. 300 million respectively.
The major objective of CDSC is to render the service by dematerializing the securities (such as shares, preference shares, debentures, bond, government securities, etc.) and update the transactions in the record by safeguarding the deposit on behalf of the buyers.
Dematerialization is a process of converting physical securities into electronic form.