In the first phase, share transactions of Square Pharma will be settled through central depository system (CDS), provided by the CDBL.

The CDS will facilitate scripless trading under the present automated system in both Dhaka and Chittagong bourses.

The CDBL will extend the service through the depository participants who will be accountable to the CDBL and Securities and Exchange Commission (SEC). So far the SEC has issued 25 licences for depository participants.

The SEC yesterday handed over the final licence to the CDBL. Addressing a press briefing after commission meeting, SEC Executive Director Forhad Ahmed said this is a major development for the country's capital market.

"The launching of CDS will quicken settlement process, remove risk of fake shares and loss of shares, eliminate hassle of shareholders as they do not need to go to the company for transfer," he said.

Dhaka and Chittagong stock exchanges will arrange spot trading of Square Pharma from January 10 to 15 as the company will declare book closure for transfer settlement. Trading of Square Pharma will be suspended during January 17-22 to pave way for dematerialising of shares. After dematerialisation, there will be no lot system, shares will be traded in odd.

He said shares of all the listed companies will be dematerialised for settlement through CDS by phases but there is no deadline. Issues of A category companies may be given priority for dematerialisation, he added.

But from now on distribution of all initial public offering will be held through CDS. Intended investors in IPO have to open account with a depository participant and investors have to mention depository account number in the IPO application. If anyone wins lottery, the investor will not be issued any allotment letter and share certificate. Shares will be credited to the investor's account, he said.

Companies with paid-up capital of TK 5 crore has to pay Tk 20,000 a year to the CDBL for CDS service, Tk 50,000 for companies with paid-up capital of Tk 20 crore and Tk 1,00,000 for firms with paid-up capital above Tk 20 crore. The CDBL is currently giving service for electronic settlement of treasury bills of Bangladesh Bank.