Functions of central depository system or cds, Finance Basics

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Functions of Central Depository System or CDS

1. Immobilization of securities that is removal of physical movement of securities.

2. Dematerialization that is removal of physical certificates or documents demonstrating entitlement to a security hence such ownership exists just as like computer records.

3. Effective Delivery Vs. payment or DVP such is simultaneous delivery and payment among the two parties transferring or exchanging securities. This can be done without delay whether CDS is linked to the central payment clearing system as like CBK.

4. Provision of detailed listings of investors consistent along with the verities of securities they hold as like preference shares and one is ordinary shares.

5. Effective Distribution of Dividends, rights issues, interests and bonus issues.

6. Provision of ownership of securities and payment of cash of book entry account electronic exchange.


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