TCS may design Central Depository System (CDS) for Nepse

Nepse is more than likely to hand out the contract to design the software for much anticipated Central Depository System (CDS) to Tata Consultancy Services (TSC). "After the preparation of software, there will not be any further delay about starting CDS," informed Shambhu Pant, Nepse's acting deputy manager and spokesperson. "Nepal's CDS will be based largely on Indian Central Depository Services Ltd (CDSL), a sister concern of the Bombay stock Exchange (BSE) as we are undertaking this project under the financial and technical support of BSE," he added. The CDS is a new clearing and settlement system being used in stock exchanges abroad. Under the CDS, the current practice of holding and moving the scrip of quoted shares physically will be replaced by a safe and dependable computerized book entry system. When investors trade under the CDS, there will be no need for delivery and receipt of physical certificates. All the physical scrips of the companies listed on the stock exchange will be recorded centrally, and investors will have CDS accounts which will show their holdings. The seller's account will be debited and the buyer's account will be credited when shares are traded by the new system automatically as is practised by major stock exchanges the world over. "The implementation of CDS will do a great deal in encouraging the investors as there will be hassle-free and swift ownership transfer and instant liquidity," said Surbir Paudyal, Chairman of Securities Board of Nepal. The increase in volume and number of share transactions after the automation of Nepse had created demand for the establishment of CDS that offers safety and convenience compared to holding securities in physical form, enhances liquidity by instantaneous transfers and delays, thefts, interceptions and subsequent misuse of certificates eliminated. The implementation of CDS is supposed to be able to wipe out inconsistency and manipulation in stock trading and make the Nepali secondary market more transparent and a significant reduction in discrepancy rates is expected by Nepse. Meanwhile, the Nepse has started the process to take the exam for new brokers. The process to add new brokers has halted since long.

Source: tht