CDBL ensures trust and reliability in capital market
Sunday, 13 December 2009
Sayed Javed Ahmad
Like in many other countries, our Central Depository System (CDS), called the Central Depository Bangladesh Limited (CDBL), is also a monopoly. After the turmoil in the stock market in Bangladesh in the early 1990s the need for automation of the bourses and the presence of a CDS was realised.
A depository is like a bank for shares instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are able to move securities and settle stock exchange transactions by an electronic update of their accounts.
In fact, all established markets in countries like India, Japan, Malaysia, Pakistan, Sri Lanka, Thailand, UK and USA have depositories.
The core service of a depository is the efficient delivery, settlement and transfer of securities through a computerised book entry system. The need for a depository arose from the shortcomings in the present settlement system. Such shortcomings are:
l Lengthy delays in delivery, settlement and transfer of securities;
l Tedious procedures for verification of securities and transfer deeds;
l Considerable time involved in dispatching cash dividends and bonus shares;
l Risk of damaged, lost, forged and duplicate securities;
l Serious problems associated with physical custody;
l Tedious procedure involved in pledging of physical securities to raise capital.
CDBL, a joint venture company set up by banks, stock exchanges, Asian Development Bank and other institutions, operates the CDS in Bangladesh. Converting physical certificates into electronic form eliminates the risks of damage, loss, forgery and duplication of share certificates. The instantaneous delivery through electronic book entry results in immediate transfer of ownership, which used to take over a month. CDBL has also reduced the costs of the investing while increasing process efficiency.
Central Depository Bangladesh Limited (CDBL) was incorporated on 20 August 2000. It was sponsored by the Nationalised Commercial Banks (NCBs), Investment Corporation of Bangladesh (ICB), Private Commercial Banks (PCBs), Foreign Banks, Merchant Banks, Publicly Listed Companies, Insurance Companies and Dhaka & Chittagong Stock Exchanges with the collaboration of the Asian Development Bank (ADB).
CDBL's core services cover the efficient delivery, settlement and transfer of securities through computerised book entry system i.e. recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. CDBL has proved to be a convenient and reliable means to settle securities transaction. The investor has been freed from the hassles of physical handling of certificates, errors in paper work and the risks associated with damaged, lost and forged certificates.
CDBL's operations are carried out in its main data centre at Karwan Bazaar in Dhaka which is linked to a remote Data & Disaster Recovery Centre (DDRC) at Topkhana Road, Dhaka, operating as a backup centre with data update taking place simultaneously. Network connectivity to Depository Participants (DP), Issuers, Banks, Stock Exchanges and Bangladesh Bank is through Front End (FE) interfaces accessed by fibre links and dial-up telephone lines.
Live operations of the CDS commenced with the inauguration of the Electronic Government Securities Registry (EGSR) by the Governor of Bangladesh Bank on 20 October 2003. The EGSR also serves as a platform for secondary market sale/purchase as well as Repo transactions of government securities to commercial banks linked online to the CDS. Equity market securities dematerialisation process i.e. eliminating physical certificate as record of security ownership by substituting it as an electronic book entry record in the CDS commenced on 24 January 2004 with the entry of Square Pharmaceuticals Limited into the CDS. Since 14 February 2003, CDBL has been acting as National Numbering Agency for International Securities Identification Number (ISIN) which is the Bangladesh partner of the Association of National Numbering Agencies (ANNA) based in Germany.
Central Depository Bangladesh Limited (CDBL) is a public limited company that operates and maintains the Central Depository System (CDS) of electronic book entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including providing a platform for the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank.
The Depositories Act, 1999 provides a legal basis for the regulation of depositories in Bangladesh. It gives regulatory responsibility to the Securities and Exchange Commission (SEC) and enables the commission to make regulations concerning the operation of the depository. The Commission has published the Depository Regulations, 2000 which set out the criteria for companies that wish to establish depository systems. The Commission has also published the Depository (User) Regulations, 2003 which are concerned with the organisations that may become participants of the depository. CDBL has been granted a Certificate of Business Commencement from the Securities and Exchange Commission to begin operations. The CDBL By-laws define the acts and responsibilities of the CDBL, Depository Participants and Issuers.
Like most companies, CDBL too has a vision that says "Central Depository Bangladesh Limited (CDBL) shall be a dynamic, forward-looking institution committed to adding value to the business of its clients. It will be equipped with up-to-date Information Technology to ensure prompt customer response and provide innovative solutions to the needs of the capital market playing a pivotal role in Bangladesh's financial services sector." The mission statement says: "CDBL will have a sound management team with carefully-chosen, highly-motivated staff fostering a spirit of enthusiasm balanced with prudent policies to achieve a high level of sophistication and expertise in the performance of its personnel by consistently striving to provide high quality services that are reliable, transparent and efficient by:
l Emphasising the importance of the customer,
l Unleashing employee initiative by empowering them,
l Viewing activities of the business as processes and the goal of continuous improvement.
Management's leadership endeavour is to forge a passionate, inspired, motivated and cohesive team to operate from a common bottom line, sharing the same agenda, driven by the same vision to achieve the best possible results, not only for the shareholders and the employees but also to boost public confidence in CDBL's growing strength as an independent, professionally managed institution."
The slogan of the company "Ensuring Trust, Reliability and Transparency in the Capital Market" reflects the values encompassing: Integrity, Risk Management, Reliability, Profitability, Learning, Team Work, Customer Care, Best IT Practices, Accountability, Innovation, and Transparency
Finally, the strategic objectives of CDBL is,
" To ensure operational excellence and effective management of enterprise risk;
l To be profitable and sustainable;
l To be customer centric;
l To follow the best global practices and develop value-added opportunities;
l To be a learning organisation, satisfying personal aspirations and enabling continuous growth; and
l To fulfil regulatory and supervisory obligations.
The CDBL is a successful and respected brand in Bangladesh's financial market, reflecting strength, trust, and reliability in the mind of the stakeholders through transparency and excellence in customer service, a legacy that is expected to continue for a long time to come.
The writer is Chief Operating Officer of the Central Depository Bangladesh Limited. He can be reached at: www.cdbl.com.bd
Like in many other countries, our Central Depository System (CDS), called the Central Depository Bangladesh Limited (CDBL), is also a monopoly. After the turmoil in the stock market in Bangladesh in the early 1990s the need for automation of the bourses and the presence of a CDS was realised.
A depository is like a bank for shares instead of money. Instead of holding shares in the form of certificates, investors have accounts in the depository and are able to move securities and settle stock exchange transactions by an electronic update of their accounts.
In fact, all established markets in countries like India, Japan, Malaysia, Pakistan, Sri Lanka, Thailand, UK and USA have depositories.
The core service of a depository is the efficient delivery, settlement and transfer of securities through a computerised book entry system. The need for a depository arose from the shortcomings in the present settlement system. Such shortcomings are:
l Lengthy delays in delivery, settlement and transfer of securities;
l Tedious procedures for verification of securities and transfer deeds;
l Considerable time involved in dispatching cash dividends and bonus shares;
l Risk of damaged, lost, forged and duplicate securities;
l Serious problems associated with physical custody;
l Tedious procedure involved in pledging of physical securities to raise capital.
CDBL, a joint venture company set up by banks, stock exchanges, Asian Development Bank and other institutions, operates the CDS in Bangladesh. Converting physical certificates into electronic form eliminates the risks of damage, loss, forgery and duplication of share certificates. The instantaneous delivery through electronic book entry results in immediate transfer of ownership, which used to take over a month. CDBL has also reduced the costs of the investing while increasing process efficiency.
Central Depository Bangladesh Limited (CDBL) was incorporated on 20 August 2000. It was sponsored by the Nationalised Commercial Banks (NCBs), Investment Corporation of Bangladesh (ICB), Private Commercial Banks (PCBs), Foreign Banks, Merchant Banks, Publicly Listed Companies, Insurance Companies and Dhaka & Chittagong Stock Exchanges with the collaboration of the Asian Development Bank (ADB).
CDBL's core services cover the efficient delivery, settlement and transfer of securities through computerised book entry system i.e. recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. CDBL has proved to be a convenient and reliable means to settle securities transaction. The investor has been freed from the hassles of physical handling of certificates, errors in paper work and the risks associated with damaged, lost and forged certificates.
CDBL's operations are carried out in its main data centre at Karwan Bazaar in Dhaka which is linked to a remote Data & Disaster Recovery Centre (DDRC) at Topkhana Road, Dhaka, operating as a backup centre with data update taking place simultaneously. Network connectivity to Depository Participants (DP), Issuers, Banks, Stock Exchanges and Bangladesh Bank is through Front End (FE) interfaces accessed by fibre links and dial-up telephone lines.
Live operations of the CDS commenced with the inauguration of the Electronic Government Securities Registry (EGSR) by the Governor of Bangladesh Bank on 20 October 2003. The EGSR also serves as a platform for secondary market sale/purchase as well as Repo transactions of government securities to commercial banks linked online to the CDS. Equity market securities dematerialisation process i.e. eliminating physical certificate as record of security ownership by substituting it as an electronic book entry record in the CDS commenced on 24 January 2004 with the entry of Square Pharmaceuticals Limited into the CDS. Since 14 February 2003, CDBL has been acting as National Numbering Agency for International Securities Identification Number (ISIN) which is the Bangladesh partner of the Association of National Numbering Agencies (ANNA) based in Germany.
Central Depository Bangladesh Limited (CDBL) is a public limited company that operates and maintains the Central Depository System (CDS) of electronic book entry, recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments, as well as various other investor services including providing a platform for the secondary market trading of Treasury Bills and Government Bonds issued by the Bangladesh Bank.
The Depositories Act, 1999 provides a legal basis for the regulation of depositories in Bangladesh. It gives regulatory responsibility to the Securities and Exchange Commission (SEC) and enables the commission to make regulations concerning the operation of the depository. The Commission has published the Depository Regulations, 2000 which set out the criteria for companies that wish to establish depository systems. The Commission has also published the Depository (User) Regulations, 2003 which are concerned with the organisations that may become participants of the depository. CDBL has been granted a Certificate of Business Commencement from the Securities and Exchange Commission to begin operations. The CDBL By-laws define the acts and responsibilities of the CDBL, Depository Participants and Issuers.
Like most companies, CDBL too has a vision that says "Central Depository Bangladesh Limited (CDBL) shall be a dynamic, forward-looking institution committed to adding value to the business of its clients. It will be equipped with up-to-date Information Technology to ensure prompt customer response and provide innovative solutions to the needs of the capital market playing a pivotal role in Bangladesh's financial services sector." The mission statement says: "CDBL will have a sound management team with carefully-chosen, highly-motivated staff fostering a spirit of enthusiasm balanced with prudent policies to achieve a high level of sophistication and expertise in the performance of its personnel by consistently striving to provide high quality services that are reliable, transparent and efficient by:
l Emphasising the importance of the customer,
l Unleashing employee initiative by empowering them,
l Viewing activities of the business as processes and the goal of continuous improvement.
Management's leadership endeavour is to forge a passionate, inspired, motivated and cohesive team to operate from a common bottom line, sharing the same agenda, driven by the same vision to achieve the best possible results, not only for the shareholders and the employees but also to boost public confidence in CDBL's growing strength as an independent, professionally managed institution."
The slogan of the company "Ensuring Trust, Reliability and Transparency in the Capital Market" reflects the values encompassing: Integrity, Risk Management, Reliability, Profitability, Learning, Team Work, Customer Care, Best IT Practices, Accountability, Innovation, and Transparency
Finally, the strategic objectives of CDBL is,
" To ensure operational excellence and effective management of enterprise risk;
l To be profitable and sustainable;
l To be customer centric;
l To follow the best global practices and develop value-added opportunities;
l To be a learning organisation, satisfying personal aspirations and enabling continuous growth; and
l To fulfil regulatory and supervisory obligations.
The CDBL is a successful and respected brand in Bangladesh's financial market, reflecting strength, trust, and reliability in the mind of the stakeholders through transparency and excellence in customer service, a legacy that is expected to continue for a long time to come.
The writer is Chief Operating Officer of the Central Depository Bangladesh Limited. He can be reached at: www.cdbl.com.bd