Central Depository Company (CDC) has further lowered the base tariff for its major depository services in order to lower the cost of doing business in the capital market.
As per the report issued by the CDC this decision to slash the tariff is “in line with the vision to facilitate capital market participants and the guidelines of Securities and Exchange Commission of Pakistan (SECP)”.
For the purpose of facilitating the induction of physical share certificates and to support digitalization, the processing charges have been cut by 50%.
Similarly, a number of tariff items for mutual funds have been lowered and the transaction fee on corporate action has been completely waived to promote leverage products.
The statement said, “Since its inception, CDC has reduced its tariff considerably on transactions, and even last year, it reduced the tariff for asset management companies. For the last three years, CDC has been consistently reducing its tariff structure.”
Head of Sales at Arif Habib Limited Saad bin Ahmed said, “From the investors’ perspective, this is not a significant cost that could have a material impact on their decision in listing or investing in a scrip, however, taking these charges to minimum levels bring us at par with global practices.
This new incentive will encourage international investors to invest in Pakistan’s market.
Ahmed added, “Digitalization of the custodian process does facilitate CDC investor account holders and help them monitor their portfolio holdings with just the click of a button”.
CEO of CDC Badiuddin Akber said CDC had gone ahead with tariff reductions despite the ongoing pandemic-driven circumstances in order to facilitate the market players.
He added, “The decision is in line with CDC’s strategy of reducing the cost of doing business and facilitating all market players, including brokers, asset management companies and most importantly, investors”.
Akber expressed gratitude towards the SECP for supporting the company to undertake reforms to promote ease of doing business and making tariff reductions that can pass on benefits to the market participants.
He noted, “It has been CDC’s endeavor to provide efficient and cost-effective services to all its participants and rationalize its tariff over the period. CDC’s board and management have always put greater emphasis on passing on the benefit of increased transaction volume and economies of scale to investors by substantially reducing its tariff over the years, which has been acknowledged and appreciated by all market players and the SECP.”