CSE’s depository arm CDS expands service offering

Central Depository Systems Ltd. (CDS), a fully-owned subsidiary of the Colombo Stock Exchange (CSE), has announced an expansion of its service offering, with the introduction of corporate action services and registrar services for companies listed on CSE and also privately held unlisted companies. 

The move essentially marks a forward integration into the depository’s value chain and is set to offer issuers, investors and other capital market stakeholders a host of benefits. 

A statement from CSE said that a number of depositaries around the world are expanding on their traditional role to be more customer facing, by offering new services and leveraging on technology. 

With this new introduction, CDS aims to develop into a more customer-centric, customer experience driven organisation. The introduction of these new services places CDS on par with regional and international depositories, with evidence of many success stories of depositaries effectively diversifying into related business areas to offer value to stakeholders. 

The new registrar service offering announced by CDS will offer coverage for corporate actions such as Dividends, Rights Issues, Capitalizations of Reserves, Mandatory Offers, Voluntary Offers, Sub-Divisions of Shares and Capital Reductions. In addition, new service introductions also include CDS maintaining the company’s share ledger, attending to regulatory and statutory requirements and delivering other forms of administrative support functions for listed entities. 

Commenting on the announcement, the Head of CDS Nalin Fonseka said: “The fact that CDS has been at the heart of the Sri Lankan stock market offers us vital differentiation and uniquely positions CDS to effectively deliver these services. Considering that these services are linked to our core services, we also have the ability to offer cost efficiencies and considerable convenience to listed companies and their investors. We have established a dedicated unit within CDS to deliver these new services.” 

He added that the new services have been well received by listed companies at-large, where since launching CDS has on-boarded eight companies for registrar services.

Commenting on how investors will benefit from these new services, Fonseka said: “Companies registering with CDS for registrar services would have the ability to electronically transfer dividends directly to an investor’s bank account, which is a seamless process where investors would receive their dividend payment on the date of payment without delays. This facility is the solution to postal delays and a longer process through which investors receive their payments at present.” 

He added that through e-Dividend payments, listed companies on the other hand are provided with an opportunity to better serve their investors through innovation. 

“Our focus is on providing tailor-made customised solutions to corporates where we understand their specific requirements with relation to registrar services and service them in a timely and efficient manner,” said he further. 

CDS was established in 1991 as one of the first depositories in South Asia. CDS presently handles DEMAT operations, accounts services, corporate action services and clearing and settlement services to its stakeholders and has dematerialised over 96% of listed securities, which is a benchmark for depositaries in the South Asian region.