Quarterly Newsletter Central Depository Company BOUNDLESS HUES OF NATURE Blue Shades of Determination The ocean blankets 71% of the Earth’s surface and is the habitat for countless creatures, corals, mammals and the like, thus ensuring that life on earth and underwater runs its respective course. In addition, the ocean provides a multitude of core benefits – food, medicine, climate regulation, oxygen regeneration – which are not only essential for sustaining the planet but also open avenues for economic growth and employment. Just as the ocean serves as an irreplaceable mammoth functioning as the driving engine of our environment, CDC serves as the driving engine of the Pakistan Capital Market, propelling the economic turbine of the country. The multifaceted organization renders unique and efficient services that are essential to all market players, re-engineering old practices and creating ease of doing business to uplift the functioning of Pakistan’s financial ecosystem. Head Office: Lahore Branch: CDC House, 99-B, Block ‘B’, S.M.C.H.S., Main Mezzanine Floor, South Tower, LSE Plaza, 19 Shahrah-e-Faisal, Karachi - 74400. Khayaban-e-Aiwan-e-Iqbal, Lahore-54000, Pakistan Tel: (92-21) 111-111-500 I Fax: (92-21) 34326031 Tel: (92-42) 36368000-3 I Fax: (92-42) 36368484-5 PSX Branch: Email: [email protected] Mezzanine Floor, Pakistan Stock Exchange Building, URL: www.cdcpakistan.com Stock Exchange Road, Karachi. Tel: (92-21) 32416774 I Fax: (92-21) 32444491 Customer Support Services: 0800 – 23275 (CDCPL) Islamabad Branch: Room # 410, 4th Floor, ISE Towers REIT Management For Overseas Callers: +92 (21) 34326038 Limited, 55-B, Jinnah Avenue, Blue Area, Islamabad. Tel: (92-51) 2895456-9 I Fax: (92-51) 2895454 Contents CDC launches new Fintech initiative, Emlaak Financials, a Mutual Fund Digital Platform & Aggregator 01 CDC transforms the Dividend Disbursement process via RAAST – Pakistan’s First Instant Payment System (MPG) 02 Habib Metro Bank (HMB) also on-boarded with CDC for facilitation of Roshan Digital Accounts for Capital Market Investments 03 CDC signs agreement with NIFT for enabling digital payments for its initiative “Emlaak Financials” 03 Sessions for Market Development & Investor Awareness Professional Clearing Member: Series of Market Consultation Sessions Series of Investor Awareness Webinars Awareness Webinar in collaboration with FPCCI 04 CDS Updates and Regulatory Changes Remote Education via NMS: Vital Messages Sent to CDS Elements 05 Notice Board RTA Reconciliation for HYE and FYE Amendments in the Procedures pertaining to Assets under Custody (AuC) Regularization of Sub-Accounts where CNIC have expired Hardware and Software Requirements 06 Proposed Amendments in CDC Regulations Statistical Highlights 07 THE CUSTODIANSLATE CDC launches new Fintech initiative, Emlaak Financials, a Mutual Fund Digital Platform & Aggregator entral Depository Company While addressing the occasion, Mr. reduced turnaround times, lower costs of Pakistan Limited, Farrukh Sabzwari - Commissioner and wider outreach.” C through its subsidiary SCD SECP lauded the launch of the ITMinds Limited, has launched the MFPD platform and shared his views, At the occasion, describing the pilot version of a digital platform for commenting the following, “It is objectives of the platform, Mr. the support of the Mutual Fund indeed a very important milestone for Badiuddin Akber - CEO CDC said, industry. This platform, named as the Mutual Fund Industry as it “After the successful integration of “Emlaak Financials”, will function as embarks on this consolidated digital Roshan Digital Accounts with Capital a digital distribution channel initially distribution channel launched for the market, CDC is now launching this for Mutual Funds, and is planned to first time in Pakistan. We, at SECP, are new FinTech solution which aims to subsequently cater to other asset strong proponents of the pave the way for the growth of the classes. re-engineering processes for Mutual Fund Industry and for promoting efficiency and promoting financial inclusion in The launch of the pilot project has transparency through digitalization Pakistan at the grass-root level. CDC been officially announced and and will continue to support and is committed to providing innovative formalized in an Agreement Signing encourage all such initiatives by tech-based platforms for Capital ceremony at the CDC House, Karachi. providing all the required Regulatory Market entities through which they Mr. Farrukh Sabzwari - Commissioner assistance in this regard. Pakistan’s can leverage CDC’s technological Specialized Companies Division mutual fund segment stands at a edge to enhance their investor (SCD) SECP presided the event. In the meager 1.6 percent of the GDP, which outreach in a convenient, informative first phase, Emlaak will provide a is very low compared to the market’s and interactive manner.” low-cost and centralized solution to potential. A major obstacle in moving investors, targeting low-risk investors the needle has been limited outreach The event was also attended by in the preamble of this project’s and focus on specific market representatives of the participating launch, but will soon be expanded to a segments. The pivotal role of AMCs and CEO MUFAP, Ms. full-fledged distribution mechanism innovation in economic development Mashmooma Majeed, who applauded catering to all types of investors. To is undeniable, and I congratulate CDC CDC’s efforts in undertaking this initiate the launch, the pilot project on coming up with this innovative initiative and playing its role for the took off with five AMC’s on-boarded solution for the Mutual Fund Industry development of the mutual fund on the platform. which will lead to higher productivity, industry. 01 THE CUSTODIANSLATE CDC transforms the Dividend Disbursement process via RAAST – Pakistan’s First Instant Payment System (MPG) In November 2019, State Bank of dividend to their shareholders It is indeed a landmark achievement Pakistan (SBP) announced its National annually (sometimes even bi-annually that Raast has now been launched and Payment Systems Strategy. The prime and/or quarterly), so it involves huge operational with CDC on-board for objective of this Strategy is to make volumes of cash to be processed. On the processing of all Dividend recommendations to design a an average, dividend of more than Disbursement transactions which will National Payments System complying PKR 300 billion in value and around extend the following process with international standards and best 2.5 million transactions are processed improvements: practices, tailored for specific on an annual basis. Currently, banks circumstances to establish a safe, are playing the role of Paying Agent • Availability of complete narration efficient and inclusive National and processing all the dividend in respect of dividend payments Payment Systems in Pakistan. payments electronically. However, the current dividend disbursement • CNIC pairing facility to exactly One of the major recommendations process could be further refined and identify the beneficiary under this strategy was the improved with the help of the latest introduction of a new payment technology to roll out a faster • Highly efficient with Bulk gateway, named Raast, for faster payment system that could also Processing processing and settlement of retail address the following issues: transactions. For the pilot • Highly subsidized cost structure implementation of Raast, SBP was • Absence of narrations against for Issuers looking for a use case where they transactions regarding dividend could find the following attributes: payment in the bank statement of CDC appreciates the trust placed in its the investors • Bulk availability of IBANs institution by the SBP and SECP and is • Non-availability of checking thankful for their support throughout • Large number of Payment CNIC at the beneficiary account the roll-out of the initiative. The Raast Transactions project is supported by Karandaaz level. which is actively working with the • Trusted and well prepared In this regard, CDC proactively SBP and SECP for the establishment of partner apprised SBP and sought to resolve National Digital Infrastructures and This was where CDC presented its use the issues that the investors have been has supported various other case of Dividend Disbursement to facing in receiving cash dividends. initiatives like the Secured Transaction SBP. CDC has been spearheading the Once the recommendation for Raast Registry, payment digitization, etc. use of new technology in Capital was announced, CDC took up this Karandaaz is also actively engaged Market to improve process flows and proposition with SBP to make with CDC for a Fintech infrastructure create a multidisciplinary network of “Dividend Disbursement” the first initiative for Capital Market, and CDC transparency by replacing old, case for Raast’s implementation in greatly acknowledges and appreciates obsolete and manual processes with Pakistan. In December 2019, SBP gave its support throughout Raast and all innovative, tech-based processes. In their concurrence to consider “Cash other mutual undertakings. 2017, CDC worked closely with the Dividend Disbursement” as a Issuers and SECP to pave the way for reference point, under the condition This initiative is in line with CDC’s implementation of E-Dividend that only one sole trusted party (i.e. vision and other initiatives that it has concept in Pakistan under the CDC) should deal on behalf of all taken up with the SBP for market regulatory framework