Obtained Bachelor of Commerce degree from the
University of Karachi in 1984. Completed audit training with A.F.
Ferguson & Co., Chartered Accountants (member firm of
PRICEWATERHOUSECOOPERS). Became associate member of the Institute of
Chartered Accountants of Pakistan (ICAP) in 1991 and obtained
membership of the Institute of Corporate Secretaries in 1993. Admitted
as fellow member of ICAP in January 2002.
Over ten years experience at middle and senior
management positions which include more than seven years in number two
position in the Central Depository Company of Pakistan Ltd. Was
appointed Chief Executive Officer of National Clearing Company of
Pakistan Ltd. (NCCPL) on January 02, 2002 and as Chief Executive
Officer of CDC in March, 2002.
Has been instrumental in the development of the
Capital Market since joining CDC in 1994. Has visited various
depositories and attended international conferences and meetings.
Represented CDC in various international organizations in which CDC is
How do you review the performance of CDC over the years?
Central Depository Company of Pakistan Limited (CDC) implemented the
Central Depository System (CDS) five years back on September 3, 1997.
Prior to the implementation of CDS the market players were facing
following difficulties in handling and managing shares and settlement
process. Problems faced by investors were: 1)
delay in transfer of ownership, 2)
cost of stamp duty 3)
delay in receipt of entitlements, and 4)
lengthy and tedious procedure involved in pledging of physical
securities. Problems faced by the brokers included: 1)
voluminous back office work, 2)
tedious, inefficient and unreliable means to settle securities
problems of handling larger volumes, and 4)
maintenance of huge vaults for safe keeping of certificates. Issuers
faced problems like: 1)
lengthy and tedious activities undertaken at the time of book closure,
hassles of dispatch and printing of certificates at the time of new
allotments or bonus, 3)
risks of damaged, lost, forged and duplicate certificates, 4)
capital and time investment for issue and dispatch of share
certificates, cash dividend, bonus and right issues, 5)
tedious process for launching of new issues, and 6)
lengthy and time consuming process of mergers/demergers. The concept
of implementing CDS was introduced by USAID and their report
highlighted all the issues mentioned above. Then the market
participants got together and formed CDC. The sponsors are Karachi
Stock Exchange, Lahore Stock Exchange, Citibank Overseas Investment
Corporation, Muslim Commercial Bank, National Investment Trust,
Investment Corporation of Pakistan, International Finance Corporation,
Pakistan Industrial Credit & Investment Corporation and Islamabad
What changes the CDC has brought in the way securities are traded in
is indeed pleasure to mention that CDS is one of the largest IT
intensive project implemented in last decade. It has connected over
1000 users in the three cities of Pakistan namely Karachi, Lahore and
Islamabad. The implementation of CDS ushered in an era of efficient
and cost effective settlement process in Pakistan. It not only
eliminated the problem faced by the market participants but also
improved the efficiency of the capital market as a whole. The current
volumes at the stock market in Pakistan would not have been possible
without the CDS. The most important thing with CDS is geographical
neutrality. It provides same level of efficiency to all clients
irrespective of their geographical location. At present over 97% of
settlement at the stock exchanges are done through CDS. Realizing the
need for providing direct access to the individual investors CDC
decided to launch Investor Account Services in 1999, which has been
proved successful. Having more than 8000 Accounts opened directly with
CDC, the performance of the company can be judged from the fact that
there are 418 (including 46 TFCs) live on CDS and nearly 7.3 billion
shares having a total vale of Rs 185.6 billion.
A large number of securities despite being declared eligible have not
become live as yet. How does the CDC intend to overcome this problem?
has been CDC's desire to take all securities in CDS. To achieve this
objective we had declared all securities as eligible for CDS in 1998.
We are proud to say that all major securities have joined the system
since then. However, a large number of securities did not join the
system citing value of security deposit the CDC require from the
issuer for joining CDC as inhibiting factor. Some of them filed
petition with Honourable Lahore High Court. However, the Court
dismissed the petition and referred the matter to Securities and
Exchange Commission of Pakistan (SECP) to decide as the Regulator of
stock market. The SECP has recently passed an order in which they have
directed CDC to reduce security deposit and Issuers of Companies to
join CDC by July 31, 2003.
Which are the sectors posing resistance against getting live and what
is the basis of their resistance?
So far a large number of textile companies have not joined CDC.
However, we have discussed the issue with APTMA and now we are hopeful
that textile companies would join CDC by the time line set by SECP.
Would the recent reduction in fees encourage these sectors to join the
The CDC not only reduced the security deposit for the companies who
have not yet joined but also refunded security deposit to all those
who have joined CDC. I think this is a big reduction which should be
availed by all and get advantage of becoming family member of it.
Do you believe that all the securities will join the CDC and can you
define the time frame for achieving the target?
sincerely feel that all companies would join, as the benefits a
company and its shareholders get are tremendous.