ISLAMABAD: The Central Depository Company (CDC) — with active support of the 1Link (Guarantee) Limited, Securities and Exchange Commission of Pakistan (SECP) and State Bank of Pakistan (SBP) — has introduced the concept of centralised e-IPO system (CES) in order to facilitate the public to apply for subscription of securities offered for sale through initial public offerings (IPOs) by providing an efficient and hassle-free mechanism to them.

Under the newly introduced system, applications for subscriptions of securities can be filed electronically. Investors having valid national identity cards, bank accounts in scheduled banks and CDC accounts can electronically register themselves “24/7 throughout the year”, according to sources.

Only registered investors may apply for subscription of securities through any of the banking channels — ATMs, internet banking, mobile Apps or over the counter.

Furthermore, CDC, with the backing of SBP, is in the process of introducing the e-dividend concept the implementation of which will ensure electronically the transfer of dividend into the investors’ bank accounts.

While the CES will increase the outreach of IPOs, promote the culture of keeping securities in book-entry form and will make the IPO process more user-friendly and efficient, the e-dividend concept will remove the inefficiencies relating to payment of dividend through dividend warrants.

With active support of the SBP, the SECP has instituted various measures to utilise the efficient banking channels to support a more efficient and hassle-free mechanism for the benefit of investors of the capital market, say analysts.

Published in Dawn, May 14th, 2017