CDSC and Nepal Life Insurance ink a deal for dematerialization of scrip

Kathmandu, December 25-

Nepal Life Insurance Company and CDS and Clearing Limited have signed an agreement for dematerialization (demat) of share certificates.

Chief Executive Officer of Nepal Life Insurance Company Vivek Jha and  Chief Executive Officer Subodh Sharma Sidgel inked the pact on behalf of their respective organizations.

CDS and Clearing Limited, known as CDSC, was established in 2010 and inaugurated in March 2011 as a company promoted by Nepal Stock Exchange Limited to provide centralized depository, clearing and settlement service in Nepal. 

CDSC is the sole depository company in Nepal which acts as the central securities depository and clearing house for securities traded at NEPSE. 

It is a place where the listed companies' securities that are

in paper form are deposited in the electronic form. Another major function of CDSC is to act as a clearing house that is responsible for the clearing and settlement of payment and ownership whenever the shares are traded. The ownership of dematerialized securities can be conveniently and shortly transferred belonging to investors deposited in demat accounts at depository participants.

CDS, which is likely to come into partial operation within a month, eliminates all physical hassles and risks associated with the physical certificates, like the risk of theft, worn out, unmatched signatures, forgery, damages to the documents, loss of certificates during transit, etc. We all know how difficult it is at present to get the shares transferred. We have heard of cases in which it has taken a month to get the shares transferred.

This system is accepted worldwide and, among SAARC countries, even Bhutan has implemented this system. Even third countries, developing countries, least developed countries and underdeveloped countries have adopted the depository system as they are well aware of its benefits.

Another positive aspect of CDSC is that it brings into speedy settlement cycle as the securities are transferred immediately resulting the increment of trade volume.

Source: Sharesansar