Business

CDC reduces fee to ramp up market

Provides 100% waiver on maintenance fee; cuts annual fee on long-term redeemable securities

Our Correspondent May 30, 2019

A man monitors an electronic board displaying stock prices at the Karachi Stock Exchange August 5, 2011. Pakistani stocks provisionally ended 3.78 percent lower on Friday as foreign investors offloaded their holdings amid a global sell-off, while local investors remained cautious, dealers said. REUTERS/Akhtar Soomro/File Photo

KARACHI: Central Depository Company of Pakistan Limited has reduced its tariff structure in the larger interest of the public in a bid to support the stock market, according to a statement issued by the company.

As the infrastructure backbone of Pakistan’s capital market, the CDC’s main objective is to provide efficient and cost-effective services to all its customers and promote the ease of doing business, it stated.

In line with this resolve, CDC has continued to pass on the benefits to market participants and general investors without compromising on its services, the statement added. As part of the recent reduction, CDC has provided 100% waiver on maintenance fee for such sub-account holders who have investor accounts as well.

In order to promote the growth of Pakistan’s corporate debt market, CDC has significantly reduced its annual fee for long-term redeemable securities by approximately 65%.

Additionally, CDC has rationalised its tariff structure for the next five years, which also includes reduction in custody fee for the year 2019-20 and 2020-21 by 14% and 16% respectively.

Commenting on the fee reduction, CDC CEO Badiuddin Akber said the initiative was taken by CDC to give much-needed relief and support to the market, especially the investing public.

“While CDC has continued to reduce its tariff since its inception, we are targeting our efforts towards helping to reduce the cost of doing business for market participants. This is our ongoing contribution to the development of Pakistan’s capital market,” said the CEO.

“It a positive gesture from the custodian of the capital market, which may attract common people towards the equity market,” said a market expert.

However, a slow growth in financial inclusion is the biggest hurdle in the way of increasing the number of investors in the market, therefore, the authorities need to focus on that front.

Published in The Express Tribune, May 30^th, 2019.

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