Central Depository Systems (Pvt) Ltd (CDS), a fully owned subsidiary of the Colombo Stock Exchange (CSE) has recently diversified its service offerings. Globally, the traditional role of Depositories is advancing to achieve more customer-centricity, by offering new services and leveraging on technology. Fronted on the same purpose, CDS in Sri Lanka has diversified on different ends over their evolution.
Positioning of CDS in the Sri Lankan Capital Market
CDS was first launched in 1991 to the Sri Lankan capital market with the responsibility of acting as the country’s sole depository for securities listed on the CSE and was established to specialize in the settlement of securities, transactions and the safekeeping of securities on behalf of domestic and international investors. With the numerous contributions, CDS has been positioned as the key infrastructure enabler in the Sri Lankan Capital Market. Currently CDS’s key role can be identified as the custodian for listed company account holders and as a liquidity provider. The same has endorsed investor confidence in terms of the number of accounts, the quantity in custody and the value of securities held at the Depository.
Maintaining a data base of this magnitude is a challenging yet a crucial role for the sustainment of the stock exchange. But with an extensive experience of three-decades in serving the capital market and being ranked as the first in the Asia Pacific region and the seventh globally, CDS has placed themselves in a globally renowned disposition. CDS is equipped with the capability and the capacity to serve the industry in its present magnitude and to successfully support its prospective expansion. This is demonstrated by the number of trades cleared and settled without any interruption to date, over the history.
Diversification of CDS service offerings
CDS has expanded their service offerings to include Registrar services for issues of companies listing on the CSE which is an advancing integration into their value chain. With this introduction, the newest listing at CSE, Chrissworld Ltd has received services of CDS as their Registrar. CDS also added a new feature of EIPO applications for Chrissworld IPO, enabling further streamlined IPO processes.
Commenting on the recent additions to its service offerings, Mr. Nalin Fonseka – Head of CDS added “Capital Market is driven through secure and convenient solutions, and as a pivotal point in the Sri Lankan Stock Market we have always led with the objective to achieve beyond our core function and evolve as a diversified service provider with stakeholder focus in priority. Over the history of CDS, it has been our constant belief that investor confidence is the key to the market sustainability. The diversification drive was launched with a view to lift the service standard and thereby investor confidence”
He further explained CDS’s approach to Diversification adding that CDS has advanced an extra mile by launching a dedicated unit which could concentrate totally on assets servicing. Operations of this unit would come under the purview of the CDS and the formalization of the operations was done three years back. Services offered by this unit has multiple benefits to listed companies and investors. This unit has the capability to handle any type of corporate actions. “Best example was the Dividend payments, listed company used digital platforms to pay dividend directly to the account holders bank account on the date of payment announced by the listed company”
Leverage on Technology
State-of-the-art technology that CDS has adopted to handle routine operations is another testament to the capacity that the organization holds. CDS has identified technology to be their key pillar for constant growth and CDS leverage on the technology for all services to compete and offer variety of services to the industry.
In striving to constantly encourage a technological eco-system and attract potential investors, CDS has offered multiple solutions. Recently launched Online IPO Application system, a popular addition among the investor community is one such advancement. This has contributed towards the substantial turnover growth and the remarkable growth in number of mobile application downloads. Currently this facility is
only available for local investors and the progress is underway to extend the same to foreign investors in the recent future.
CDS has handled seven Annual General Meetings (AGM) to some of the leading listed companies and is known as the first service provider to handle virtual AGMs. Virtual AGMs served as a valuable asset for companies and investors during the COVID pandemic as it enabled a mooth continuation of processes.
Investor account opening process plays a pivotal role in stock market investments. Therefore, Digital Onboarding, which is introduced with a key contribution from Broker firm representatives eliminates physical documentation submission process and attracted a number of investors to the market. This initiative, which was initiated by the CSE & SEC joint committee, was well accepted by the investor
CDS is very confident of a stock market presenting itself as a total online digital end-to-end solution for investor community. Commenting on prospective digital developments CDS commented “We are developing a dedicated e-Access platform, for investors to access all CDS account requirements via the convenience of simple press of a button. The facility is projected to be launched by the end 2021. This initiative is equally aligned with the responsible Environmental, Social and Corporate Governance (ESG) element that CDS constantly strives to achieve. The process of submitting paper documents will totally be replaced with the implementation of the eConnect, the portal which provides all online Depository solutions to the investor community and the listed companies.”