Advantages of central depository system or cds, Finance Basics

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Advantages of Central Depository System or CDS

1. It shortens the registration procedure in the stock exchange that is high speed of registering shareholders.

2. It improves the liquidity of stock exchange than raise the turnover of the equity shares in the market.

3. It will lower the clearing and settlement cost as like no require preparing share certificates and sealing them or putting a seal.

4. Its faster and less risky settlement of securities which make the market more attractive for investors as like instances of fraud will be reduced as there is no physical share certificate that may be forged.

5. There will be improved and timely communication between the investors and a company therefore reduced delay in getting dividends and right issues and develops information dissemination relating to a company.

6. It will lead to transparent and an efficient securities market to adhere to International Standards for the benefit of all stakeholders.


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