Q: What do the initials CDBL stand for?

A: Central Depository Bangladesh Limited

 Q: Will all brokers be participants?

A: All brokers must have access to the system (either directly or indirectly) to settle stock exchange transactions. However, only some brokers, upon obtaining certificate of registration from the SEC, will become full service participants and will be able to manage accounts on behalf of customers Contact CDBL for an up to date list of full service participants.

Q: Who, other than brokers will be participants?

A: Financial Institutions may become participants to manage the securities they hold. In addition banks, who offer domestic, regional and global custody services may also become participants. Contact CDBL for an up to date list of custody participants.

Q: Are all listed securities eligible for holding and settlement in CDBL?

A: In the long term all listed securities should become eligible securities. However, the depository will make securities eligible one b one (or in groups) to ensure that the system is not overloaded and that all issuers receive proper training in the operation of the system. Contact CDBL for an up to day list of eligible securities.

Q: Is it safe to hold my securities in CDBL?

A: CDBL has to keep satisfied the Securities and Exchange Commission that it has implemented a system that is safe and secure. In addition the Commission has ongoing regulatory responsibility for CDBL. All messages between CDBL and the participants are encrypted and CDBL has a hot standby site so that all data is duplicated. The Law makes CDBL responsible for compensating investors if they suffer loss as a result of the negligent actions of CDBL or its employees.

Q: Will all investors need to have CDBL accounts?

A: An investor who does not trade will not be forced to have a CDBL account. However, the use of a CDBL account (either Direct or through a Participant) would remove the need to keep paper share certificates in a safe place. Periodic statements would ensure that these investors always have an up to date record of their investments.

Q: If I hold my shares in CDBL can I vote at company meetings?

A: Yes, The Law requires companies to treat depository account holders as members of the company for all purposes.

Q: If I hold my shares in CDBL, will I receive my dividends? 

A: Yes, The Law requires companies to treat depository account holders as members of the company for all-purpose. In most cases you will receive your dividend from the company in the same was you do today. However the regulations permit companies to use facilities offered b CDBL to distribute dividends if they wish to do so.

Q: How do I open an account?

A: You will need to open an account through a participant unless you wish to open a Direct Account at CDBL.

Q: What will it cost me?

A: This will depend on which participant you use. The amount the participant will charge you is not fixed by the Law or the Regulations.

Q: Can I rematerialise at any time? 

A: Yes, However, CDBL will charge your participant a fee for rematerialisation, which will be passed on to you.

Q: What happens if I die?

A: Your securities will be transferred to your heirs or rematerialised in accordance with normal legal procedures.

Q: Can I open a joint account with another?

A: Yes, but you will need to agree with your participant whether both signatures or only one are required on any instructions affecting the account.

Q: Should wait until I want to sell to dematerialize my securities

A: You may do this if you wish. However, In this case, you will need to wait until the issuer has confirmed that the securities have been dematerialized before the broker can enter the sell order into the market. This will take time.

Q: What is a depository needed?

A: 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.

Q: Who are the Owners of CDBL?

A: The Depository Regulations, 2000 requires that the sponsors of any depository be a

• Financial institution;

• Bank;

• Stock exchange;

• Body corporate established or formed under any law;

• Company listed with any stock exchange; or

• Other national or international institution specified by the SEC.

Accordingly the stakeholders of CDBL, numbering over 70 institutions are:

• Nationalized Commercial Banks;

• Provide Commercial Banks;

• Foreign Commercial Banks;

• Insurance Companies;

• Dhaka Stock Exchange;

• Chittagong Stock Exchange;

• Investment Corporation of Bangladesh;

• Listed Companies; and

• The Asian Development Bank

This wide spread of ownership demonstrates the support of the financial market in Bangladesh for the development of a Central Depository System (CDS).

Q: Who are the Participants of CDBL?

A: The following types of organizations may become CDBL participants:

1.      Stock brokers/dealers (members of the Dhaka and Chittagong Stock Exchanges);
2.      Banks;
3.      Financial institutions;
4.      Insurance companies;
5.      A statutory organization;
6.      Merchant bankers;
7.      Asset managers;
8.      Custodians; and
9.      An other capital market intermediaries registered with the SEC.

Q: About the Categories Participants at CDBL? 

   Trading Participant
        May only settle stock exchange trades and cannot maintain accounts on behalf of customers;

     Full Service Participant
        This is a stock exchange member who may hold shares and operate accounts on behalf of  customers;

   Custody Participant
        May hold shares and operate accounts on behalf of customers but is not a stock exchange member;

   Settlement Agent Participant
        May settle stock exchange trades on behalf of stock exchange members.

Q: What is about Direct Accounts?

A: CDBL is offering a service to investors who wish to hold their securities in dematerialized form but do not wish to use a stockbroker or a bank to do so. Investors will be asked, by CDBL, to complete an account opening form. They will then be able to dematerialize existing holdings by giving the certificates to CDBL or to their stockbrokers and completing the dematerialization request form. When they wish to sell their securities they should instruct CDBL in writing to transfer the required number of securities to the stockbroker. When they buy they should instruct their stockbroker