Excerpts from an exclusive interview with Ejaz Ali Shah

Nov 27 - Dec 03, 2000

Obtained Bachelor of Business Administration (M.I.S.) from the University of Oklahoma, U.S.A. in 1989.

Served as Functional Database Administrator & Systems Analyst / Programmer Analyst in Cordoba Corporation, Los Angeles from November 1989 to January 1992. Served Management Automation Group as Project Manager from January 1992 to February 1994 and in Fidelity Investment Bank Limited as Manager, Money & Capital Markets, from February 1994 to March 1997.

Currently serving as Head of Marketing & Customer Support Services in the Central Depository Company of Pakistan Limited since March 1997.

The affect of CDC on the workings of equities market is tremendous. In fact, CDC has revolutionized the settlement procedures of stock exchanges completely. It has not only reduced the cost of processing transactions for investors as well as CDS elements, it has also brought extra ordinary efficiency and transparency in security transactions which was desperately required to restore the investors (both local and foreign) confidence. This change has brought our market at par with rest of the world.

In a short span of a little over three years, CDC has managed to induct about 340 securities into Central Depository System, which represent approximately 98% of settlement at stock exchanges, thereby eliminating paper settlement along with the problems associated with it like fake/stolen/lost share certificates etc. Since settlement through CDS is electronic, the transfer of ownership is instantaneous (which previously used to take 45 days) and it does not attract stamp duty reducing the cost of investors.

Besides settlement services, we also provide:
Delivery versus Payment Facility:

Delivery versus Payment (DvP), a safe and efficient settlement system, is a bilateral transaction between two Account Holders/Participants in which funds and securities are transferred from one account to another electronically. DvP reduces the settlement risk through simultaneous exchange of securities and funds.

Investor Account Services

Investor Account Services allow investors to directly open and maintain accounts in Central Depository System for electronic settlement of securities. Earlier, to settle the securities through Central Depository System, investors had to open client accounts (sub accounts) or group accounts with the Participants (brokers & financial institutions). Now, with Investor Account Services, investors can also have direct access to CDC. The need for direct access was greatly felt among investors after the introduction of CDS. By opening investor accounts with CDC, investors no longer have to worry about the custody of their securities because investors now have direct access to their securities, which are maintained by CDC in accounts operated directly and only on the instructions of investors.


An Account Holder or a Participant, acting either on his/her own behalf or on behalf of his/her client, can place securities under pledge. Placing securities under pledge results in the securities being flagged as no longer available for delivery until released from pledge. The electronic pledge of shares reduces the hassles involved in keeping physical custody of shares as well as reducing the element of risk. In case of a default by client, the participant can sell out the shares and recover the loan without delay. Also in case of repayment of loan, the client gets his shares back immediately.

Help Desk

The idea behind formation of help desk is to provide instant customer support services regarding the use of Central Depository System software and workings of Central Depository Company. It is an interface between CDC & its users and it is also being used as a tool to educate the users. We have also arranged a Universal Access Number (111-111-900) for easy accessibility of the Help Desk staff in Karachi, Lahore and Islamabad.

Certainly. You will appreciate that CDC is not a profit maximizing organization. Our focus is more on helping our equities market to become more efficient and transparent then to generate revenues and our track record is a witness to our claim. We have reduced our charges significantly since becoming operational we will continue to do so in future as well. Our aim is to generate enough revenue to keep running and to keep some for future growth. As and if we make more, we reduce our charges.

As you are aware that all transactions are logged electronically in the Central Depository System. Investors can therefore monitor each and every movement in their account if they so desire and can take action if their account is being managed in violation of Central Depositories Act 1997 or Central Depository Company of Pakistan Limited Regulations. It is to be noted here that Central Depositories Act 1997 prohibits CDS Participants to move securities out of client account without proper authorization of respective account holder.

Future plans of CDC include a Central Clearing House (National Clearing & Settlement System) serving the Karachi, Lahore and Islamabad Stock Exchanges. The implementation of this project is expected to be completed by September 2001. Besides this, CDC is working towards developing a system for electronic settlement of Treasury Bills and Federal Investment Bonds. The system shall increase the efficiency of money market operations as well as reducing the risk for investors.