Instant account openings with stockbrokers under CDS’ decentralisation project

Wednesday, 19 February 2020 02:10 - - {{hitsCtrl.values.hits}}

Sri Lankans can now open a securities account instantly with their stockbroker under a new decentralisation program initiated by the Central Depository Systems (CDS).

This eliminates the need to forward application forms and connected documents to the CDS, wait for the CDS to open the account, offer confirmation to the stockbroker and for the stockbroker to finally notify the accountholder.

This empowerment will grant stockbrokers a greater level of flexibility to service investors more efficiently and in a timely manner.

The CDS recently upgraded its systems to enable stockbrokers to create CDS accounts on behalf of their clients, which enables the investor to trade immediately. Stockbrokers have also been given the ability to carry out broker-to-broker portfolio transfers without the intervention of the CDS, thus providing the convenience of a faster service to their clients.

A CDS account is a pivotal aspect of trading securities at the Colombo Stock Exchange and new investors are required to open a CDS account before commencing trading. The new process will empower stockbroker firms to promptly respond to investor requests and work more closely with the investor at the point a CDS account is opened. This will also streamline the KYC process and fast-track registering new investors and offer them the ability to save time and maximise investment opportunities.

The initiative will reduce the time taken to carry out these functions and enable faster and smoother service delivery. Stockbroker firms have played a lead role in ensuring a smooth transition to this globally accepted practice, which is set to uplift industry standards and place them on par with their peers globally.

Depositories are expanding their traditional role, bolstering their service offering and decentralising functions to offer better value to stakeholders which was noted in a survey carried out by CDS amongst members of the Asia-Pacific Central Securities Depository Group (ACG).

Commenting on the initiative, CDS Head Nalin Fonseka said: “The decentralisation of the account opening and investor portfolio transfer process will provide impetus for greater efficiency. The Ease of Doing Business is a key parameter for prospective investors and this initiative will equip stockbroker firms with the required decision-making ability within the account-opening space, which I am certain will foster a greater level of convenience to the stockbroker and the investor.”