Central Depository Bangladesh Limited
(CDBL) was incorporated as a public limited company
on 20th August 2000 to operate and maintain the Central
Depository System (CDS) of Electronic Book Entry, recording
and maintaining securities accounts and registering
transfer of securities; changing the ownership without
an physical movement or endorsement of certificates
and execution of transfer instruments, as well as various
other investor services including facilitation of the
secondary market trading of Treasury Bills and Government
Bonds issued by the Bangladesh Bank.
What
is a depository?
A
depository is like a bank for shares instead of money.
Instead of holding shares in the form of certificates,
investors have accounts in the depository and are able
to move securities and settle stock exchange transactions
by an electronic update of their accounts.
Virtually
all established markets have depositories including
India, Japan, Malaysia, Pakistan, Sri-Lanka and Thailand,
UK and USA.
The
core service of a depository is the efficient delivery,
settlement and transfer of securities through a computerized
book entry system.
What
is a depository needed?
The
need for a depository arose from shortcomings in the
present settlement system, resulting in:
-
Lengthy delays in delivery settlement and transfer
of securities;
-
Tedious procedures for verification of securities
and transfer deeds;
-
Considerable time involved in dispatching cash dividends
and bonus shares;
-
Risk of damaged, lost, forged and duplicate securities;
-
Serious problems associated with physical custody;
- Tedious
procedure involved in pledging of physical securities
to raise capital.
Central
Depository Bangladesh Limited (CDBL), a joint venture
company setup by banks, stock exchange, Asian Development
Bank and other institutions operates the Central Depository
System (CDS) in Bangladesh.
CDBL,
by converting physical certificates into electronic
form, will eliminate the risks of damaged, lost, forged
and duplicate share certificates. The instantaneous
delivery through electronic book entry will result in
immediate transfer of ownership, which presently can
take over a month. CDBL, in the long term, will also
reduce the costs of the investing public.
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