The Depository Trust and Clearing Corporation (DTCC) in New York has signed a memorandum of understanding (MoU) with the Central Depository Company of Pakistan Limited (CDC), designed to forge closer ties between the two organisations.
Under the terms of the MoU, the CDC and DTCC agreed that their respective senior management and staff could meet on a regular basis to increase mutual understanding and exchange market updates and discuss improvement opportunities and information on business operating models, a press release issued here on Thursday said.
The MoU also noted that "the parties anticipate developing a closer working relationship in the future and wish to maintain channels of communication for exchange of information and to promote visits for reasons of friendship and other business purposes.
"Pakistan has seen an exponential growth in the level of investment, especially foreign investment, and capital market growth in the past few years, and we are delighted to work more closely with CDC through the execution of this new agreement," said DTCC Chairman-elect and Chief Executive Officer Donald F. Donahue.
"This agreement will provide a more formal structure to exchange ideas, share market insights and develop co-ordinated ways of working with each other in the new global environment, ultimately benefiting the investors through development of a safe and reliable global securities infrastructure", he added.
"Central Depository Company of Pakistan Limited is pleased to sign the MoU with the Depository Trust and Clearing Corporation," said CDC CEO Muhammad Hanif, who is also chairman of the Asia-Pacific CSD Group (ACG), an informal international organisation of more than 30 depositories in the region.
"This memorandum is the first step towards extending cooperation between the two organisations in securities' depository-related matters. The idea is to apprise each other about the developments in respective markets and to learn from each other's experience. We have enjoyed a very cordial relationship with the DTCC in the past, and this memorandum will further boost our relationship", he added. "CDC strongly believes in innovation in terms of providing efficient solutions to maximise customer convenience," he said.
"This conviction has positioned us as a strong and vibrant national institution in Pakistan. The signing of the MOU with DTCC would provide CDC an opportunity to learn from the advanced market of the United States in the area of technology, operational activities and customer care. "We sincerely hope that this initiative will be beneficial for both the institutions and the respective markets", he said.
The pact with Pakistan marks the latest in a series of agreements signed by DTCC with depositories in Asia. It currently has agreements and ongoing cooperation and information sharing with the depositories of Taiwan, Japan, Korea, India and China.
The Central Depository Company was established in 1997 to introduce electronic custody of shares and paperless settlement of securities. It is the only securities depository of the country, sponsored by the stock exchanges, national and international institutions and regulated by Securities Exchange Commission of Pakistan. The main function of CDC is to operate and maintain the Central Depository System (CDS), drawing guidance from a well-defined legal framework. The CDS is an electronic book entry system to record, maintain and to register transfer of securities. It offers transparent and instantaneous transfer of ownership of securities, direct credit of corporate entitlements/allotments; secure custody and convenient pledging of securities.
CDC introduced investor account services in 1999, enabling retail investors to open and maintain securities' account directly with CDC and thereby being in complete control of their holdings. Through the services of CDC access, which includes an interactive voice response (IVR) and an interactive Web, CDS account holders can get their account information from anywhere in the world.
In addition to the core service, the company has diversified its operations to provide custodial and trustee services (C&TS) to mutual funds. In a short span of time since commencement of C&TS in 2002, CDC has emerged to be the largest provider of Trustee and Custodial Services in the country's private sector.
The future seems promising for CDC as it is adhering to its core values of reliability, integrity, transparency and efficiency and boasts a position of prestige in the financial sector remaining at the forefront of the capital market development.
The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities and over-the-counter derivatives.
In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's depository provides custody and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at 36 trillion dollars. Last year, DTCC settled more than 1.5 quadrillion dollars in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas.-PR.
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