Karachi: The National Clearing Company of Pakistan Limited (NCCPL), which provides clearing and settlement services to all three stock exchanges in the country, announced formal full launch of its latest service for the capital market investors — National Custodial Services (NCS).
In a bid to further strengthen efficiency, transparency and convenience of capital market operations, the NCS provides an option to Investors to directly settle their trades and transactions with the NCCPL and also maintain the custody of securities and cash with NCCPL while they can continue to execute trades and transactions in the capital market with the Trading Right Entitlement Certificate (TREC) holder(s) of their choice.
At a press briefing on Thursday, NCCPL Board Chairman Nadeem Naqvi said that such a model offering security and transparency to investors was the need of the hour.
“Growing interest of investors in the capital markets, driven by attractive returns, limited availability of alternate investment opportunities and reduction in the returns offered by money market instruments, indicated the need to develop an option, like NCS, whereby custody of securities and cash can be maintained by a separate entity to further strengthen efficiency and transparency of the capital market operations,” Nadeem Naqvi observed:
NCCPL CEO Mohammad Lukman asserted that the capital markets in Pakistan had great potential to attract investment and provide competitive returns; however, providing an efficient and transparent operating process was essential for continued development of the capital markets.
“The NCS is an effort made by NCCPL to add to the effectiveness of the capital market operations. It offers safe custody of investors’ cash and securities in a cost-effective manner and facilitates the TREC Holders by providing relief in margin and capital adequacy requirements,” he said and added that it was an investor-oriented service with complete focus on providing the desired level of confidence and security as well as convenience required by an investor while making investment decisions.
NCS was looked forward to play a vital role in attracting new interest and retaining existing investors of the capital markets.
The modalities of subscribing to NCS for admission as NCS eligible client of NCCPL were explained. It was stated that the NCS offered many benefits to investors, including net settlement of trades directly with NCCPL, safekeeping of securities and deposits, hassle-free bookkeeping and reduced administrative work, deposit and collection of funds through online banking channel, competitive returns on cash balances and direct collection of capital gains tax.
