What do the initials CDBL stand for?
A: Central Depository Bangladesh Limited
Will all brokers be participants?
All brokers must have access to the system (either
directly or indirectly) to settle stock exchange transactions.
However, only some brokers, upon obtaining certificate
of registration from the SEC, will become full service
participants and will be able to manage accounts on
behalf of customers Contact CDBL for an up to date
list of full service participants.
Who, other than brokers will be participants?
A: Financial Institutions may become participants to
manage the securities they hold. In addition banks,
who offer domestic, regional and global custody services
may also become participants. Contact CDBL for an up
to date list of custody participants.
Are all listed securities eligible for holding and settlement
In the long term all listed securities should become
eligible securities. However, the depository will
make securities eligible one b one (or in groups)
to ensure that the system is not overloaded and that
all issuers receive proper training in the operation
of the system. Contact CDBL for an up to day list
of eligible securities.
Is it safe to hold my securities in CDBL?
CDBL has to keep satisfied the Securities and Exchange
Commission that it has implemented a system that is
safe and secure. In addition the Commission has ongoing
regulatory responsibility for CDBL.
messages between CDBL and the participants are encrypted
and CDBL has a hot standby site so that all data is
duplicated. The Law makes CDBL responsible for compensating
investors if they suffer loss as a result of the negligent
actions of CDBL or its employees.
Will all investors need to have CDBL accounts?
A: An investor who does not trade will not be forced
to have a CDBL account. However, the use of a CDBL
account (either Direct or through a Participant) would
remove the need to keep paper share certificates in
a safe place. Periodic statements would ensure that
these investors always have an up to date record of
If I hold my shares in CDBL can I vote at company meetings?
A: Yes, The Law requires companies to treat
depository account holders as members of the company
for all purposes.
If I hold my shares in CDBL, will I receive my dividends?
Yes, The Law requires companies to treat depository
account holders as members of the company for all-purpose.
In most cases you will receive your dividend from
the company in the same was you do today. However
the regulations permit companies to use facilities
offered b CDBL to distribute dividends if they wish
to do so.
How do I open an account?
A: You will need to open an account through
a participant unless you wish to open a Direct Account
What will it cost me?
A: This will depend on which participant you use.
The amount the participant will charge you is not
fixed by the Law or the Regulations.
Can I rematerialise at any time?
A: Yes, However, CDBL will charge your participant a
fee for rematerialisation, which will be passed on to
What happens if I die?
A: Your securities will be transferred to your heirs
or rematerialised in accordance with normal legal procedures.
Can I open a joint account with another?
A: Yes, but you will need to agree with your participant
whether both signatures or only one are required on
any instructions affecting the account.
Should wait until I want to sell to dematerialize my
You may do this if you wish. However, In this case,
you will need to wait until the issuer has confirmed
that the securities have been dematerialized before
the broker can enter the sell order into the market.
This will take time.
is a depository needed?
The need for a depository arose from shortcomings
in the present settlement system, resulting in:
delays in delivery settlement and transfer of securities;
procedures for verification of securities and transfer
time involved in dispatching cash dividends and
of damaged, lost, forged and duplicate securities;
problems associated with physical custody;
procedure involved in pledging of physical securities
to raise capital.
Depository Bangladesh Limited (CDBL), a joint venture
company setup by banks, stock exchange, Asian Development
Bank and other institutions operates the Central Depository
System (CDS) in Bangladesh. CDBL, by converting physical
certificates into electronic form, will eliminate the
risks of damaged, lost, forged and duplicate share certificates.
The instantaneous delivery through electronic book entry
will result in immediate transfer of ownership, which
presently can take over a month. CDBL, in the long term,
will also reduce the costs of the investing public.
Who are the Owners of CDBL?
The Depository Regulations, 2000 requires that the
sponsors of any depository be a
corporate established or formed under any law;
listed with any stock exchange; or
national or international institution specified
by the SEC.
the stakeholders of CDBL, numbering over 70 institutions
Corporation of Bangladesh;
Asian Development Bank
wide spread of ownership demonstrates the support of
the financial market in Bangladesh for the development
of a Central Depository System (CDS).
Who are the Participants of CDBL?
following types of organizations may become CDBL participants:
Stock brokers/dealers (members of the Dhaka
and Chittagong Stock Exchanges);
A statutory organization;
An other capital market intermediaries registered
with the SEC.
Q: About the Categories Participants at CDBL?
settle stock exchange trades and cannot maintain accounts
on behalf of customers;
is a stock exchange member who may hold shares and
operate accounts on behalf of customers;
hold shares and operate accounts on behalf of customers
but is not a stock exchange member;
Settlement Agent Participant
settle stock exchange trades on behalf of stock exchange
What is about Direct Accounts?
is offering a service to investors who wish to hold
their securities in dematerialized form but do not
wish to use a stockbroker or a bank to do so. Investors
will be asked, by CDBL, to complete an account opening
form. They will then be able to dematerialize existing
holdings by giving the certificates to CDBL or to
their stockbrokers and completing the dematerialization
request form. When they wish to sell their securities
they should instruct CDBL in writing to transfer the
required number of securities to the stockbroker.
When they buy they should instruct their stockbroker
to transfer the securities to the Director Account
on the settlement day. It is not necessary, in this
case, to instruct CDBL. CDBL will not handle funds
and investors must make arrangements to settle payments
directly with their stockbrokers. CDBL will issue
statements directly to the account holder on a monthly
basis, if there are any movements and on a quarterly
basis, if there are no movements.
About the Method of Operation
of Operation are given below:
The investor opens an account with a participant
2. Certificates are 'dematerialized' by lodging them
at the issuer.
The issuer updates the register and moves the
holding to the depository portion of the register.
The investor sells on a stock exchange through
a stockbroker and another investor buys.
The stock exchange advises CDBL to update its
CDBL debits the sellers account.
CDBL credits the buyers account.
Investors may dematerialize if they wish.
What is the Procedure open an Account?
Investors may open an account with any CDBL participant
for an up to day list of participants please call
CDBL help line. The participant will request the investor
to sign an agreement, which will set out the rights
and duties of both the investor and the participant
. The participant will then open an account for the
investor at CDBL. Normally the account will be in
the name of the investor. If the participant is going
to mix one investors securities with another in an
omnibus account then this must be specifically stated
on the agreement. Where the account is in the name
of the investor then the Law provides that the account
holder is a member of the company even though his
securities are dematerialized. The participant is
required (under the regulations) to provide statements
on at least a monthly basis if there are movements
on the account. Even if there are no movements the
participant must provide a quarterly statement.
What is Dematerialization (demat)
is a process by which physical certificates are converted
into electronic form for credit to the investors account
in the depository. Once a security is eligible for
holding in CDBL then all stock exchange trades must
be settled through the depository. This means that
sellers must have securities in the depository (i.e.
the securities must have been dematerialized) before
the broker can execute the sale order.
To dematerialize securities investors should take their
share certificates to a participant. The participant
will request the investor to complete a dematerialization
request form. The participant will take the documents
to the issuer who (if the certificate is valid) will
update the register by moving the securities from the
certificated portion of the register to the depository
portion. The issuer will then confirm the dematerialization
to the depository and the depository will credit the
securities to the investor's account. The participant
will be able to see the balances in all the accounts
that he controls through a computer link with CDBL.
Investors do not need to wait until they wish to sell
to dematerialize their holdings. Once a security is
eligible, investors may open accounts and lodge securities
at any time.
How Buying and selling are happening?
A: The introduction of CDBL does not make any
difference to the process of buying and selling although
it does make a difference to the settlement of such
trades. Where investors have a CDBL account through
their broker then the act of giving a sell order to
the broker also authorizes him to move Sucrets from
the account to settle the sale. The broker will move
the securities when he enters the order into the market.
If the order is executed then the securities are used
to settle the sale. If the order is not executed then
the broker will move the securities back to the investor’s
Where investors have a CDBL account through a custodian
(who is not a broker) then they must advise their custodian
that they have sold as they do for physical securities.
However, the securities must be in a CDBL account before
they are sold and the broker may wish to check this
fact with the custodian before executing the order.
On the settlement date of a bough trade the broker
will move securities to the account of the buying investors
(provided the investor has paid). Investors may leave
the securities in their account (ready for sale when
they wish to sell or to avoid the need to hold certificates)
or they may request the participant to rematerialise
What is the procedure for Rematerialisation (remat)?
rematerialise securities that are in a CDBL account
the account holder must instruct the participant through
which he holds his account by completing a rematerialisation
The participant will instruct CDBL and the securities
will then be debited from the account upon confirmation
by the issuer.
The issuer will transfer the holding from the depository
portion of its register to the certificated portion
of its register.
The issuer will provide the investor with a share certificate
within 30 days of a rematerialisation request.
Q: About Fees & Deposits will
CDBL will charge fees to participants, issuers and Direct
Account Holders, who are also required to lodge security
deposits with CDBL, which are refundable upon termination.
CDBL does not charge fees directly to account holders.
Participants are charged fees which they ma recover
from investors holding accounts with them. Prospective
Direct Account Holders should contact CDBL for an up
to date fees & deposits schedule.
Q: Which Technology does CDBL
Main Data Centre
of CDBL is equipped with HP9000 rp7400 Enterprise
Class Servers, HP SureStore E Disk Array FC60 Controller,
HP SureStore E DLT Library 4/40 Deskside and ancillary
Disaster Recovery Backup Centre
of CDBL is located at Grameen IT Park, Mirpur
and equipped with another set of the same equipment
as the Main Data Centre.
is every fifteen minutes via radio link using Cisco
Aironet 350 devices.
Software application VeDAS (Versatile Engine for Depository
Accounting System) is built on a threetier architecture,
with Visual Basic as the Front End, TUXEDO as the
middle tier transaction manager, and Oracle 8I as
the Back End Centralized database.