KARACHI, Oct 15: The Central Depository System (CDS) — the electronic stock settlement system managed by the Central Depository Company (CDC) — remained bogged down on Tuesday. The CDC informed the Karachi Stock Exchange that due to “technical problems”, the system had remained unavailable to the bourse all through the day.

A notice issued by the KSE to the members in the evening stated: “The CDC has communicated to the Exchange that the system is expected to be available by 9 p.m today,” adding, “consequently, the settlement scheduled on October 15, shall commence in the late evening when CDS would be available.”

The notice went on to say that the CDC had further communicated that the following activities for all 26 ICP Mutual Funds (whose book closures commenced today) might be available by Monday: deposit & withdrawal requests; DVP transactions; free delivery inter & intra transactions (including future dated) and pledge, pledge release & pledge call.

The KSE notice further stated that in view of the non-availability of the above-mentioned functionalities in the ICP Mutual Funds, its scheduled settlement in T+3 market might be re-scheduled and would be notified to the members accordingly. “All the members are requested to make arrangements in respect of delivery settlement and payment of deposit against exposures and losses in the late evening today,” the KSE notice concluded.

It is five years since the CDC began live operations and the company is responsible for settlement of over 97 per cent of the total settlement, representing a market capitalisation of shares equivalent to Rs455.77 billion. Till date, there are 393 live securities in CDS that account for the majority of trading at the stock exchanges in Pakistan.

Only last month chief executive officer of CDC, Mohammad Hanif Jakhura had told a press conference that CDC had launched its contingency site in September 2000. “The contingency site, which is fully operational alternate site equipped with the similar production infrastructure as in the Primary Site is an alternate arrangement to provide uninterrupted services to the CDC clients, at all times,” the CDC chief had stated.

Hanif Jakhura is abroad and was therefore not available for comments on Tuesday, but a senior company official in response to queries said that CDS did have full backup arrangements in place, but the nature of “technical problem” encountered on Tuesday, was unforeseen. He, however, went on to say that CDS had met with an earlier problem in December last year, resulting in suspension of system, but assured that it had been resolved without any loss to the market or its participants.

Some of the market players who could be contacted on Tuesday evening aired some slight apprehension, for they really were not sure how settlements could be done, even if CDS was available, as late as three hours close to mid-night. A senior broker, nonetheless, fathomed that settlements between broker and stock exchanges might be made, where brokers decide to keep offices open at that late hour. “However, it looks like broker to client settlement and payment would have to wait till the banks open in the morning on Wednesday,” he said.