When you buy shares on the PSX, you don't receive a paper certificate. So where are your shares? They're kept electronically at the Central Depository Company of Pakistan (CDC). Understanding CDC helps you see how safe your shares are and how to check them yourself.
CDC explained with a simple example
Think of CDC as a bank for shares. A bank keeps your money and records every deposit and withdrawal. CDC keeps your shares and records every share that comes in or goes out of your account. Your broker is like a bank teller: it carries out your instructions, but the official record of what you own sits with CDC.
The three pillars of Pakistan's stock market
| Institution | Role | Simple comparison |
|---|---|---|
| PSX (Pakistan Stock Exchange) | Where buy and sell orders are matched | The marketplace |
| NCCPL (National Clearing Company) | Calculates who owes what after trades and settles payments | The accountant |
| CDC (Central Depository Company) | Holds shares electronically and moves them between accounts | The vault |
All three are regulated by the Securities and Exchange Commission of Pakistan (SECP). CDC was established in 1997 and is the country's only central securities depository.
What CDC does
- Electronic safekeeping: shares are held as book entries, so there's no risk of losing or damaging paper certificates.
- Settlement: after a trade, CDC moves shares from the seller's account to the buyer's.
- Corporate actions: bonus shares and rights are credited to your account automatically.
- Account services: investors can see their holdings online and receive alerts.
- Other services: share registrar services for companies, trustee services for mutual funds, and systems for IPO applications.
A trade, step by step
Sana buys 200 shares through her broker on Monday.
- Her order is matched with a seller on the PSX.
- NCCPL works out the money and shares each side owes.
- On settlement day, CDC moves 200 shares into Sana's CDC sub-account, and she gets an SMS alert.
CDC sub-account vs CDC Investor Account
| CDC sub-account | CDC Investor Account | |
|---|---|---|
| Opened through | Your broker | CDC directly |
| Held under | The broker's participant account, in your name | Your own account at CDC |
| Used for | Day-to-day buying and selling | Safekeeping shares you don't trade often |
| Who can move shares | The broker, on your instructions | CDC, only on your direct instructions |
Most investors only use the sub-account their broker opens. PSX encourages long-term investors to also consider a CDC Investor Account for extra control. You can move shares there and bring them back to your broker when you want to sell.
How CDC helps protect you
- SMS and email alerts whenever shares move in or out of your account. If you get an alert for something you didn't do, contact your broker and CDC immediately.
- Online access through CDC's investor portal to check your holdings independently of your broker.
- Account statements you can compare with your broker's statements.
Make it a habit to check your CDC holdings every month. It's the easiest way to confirm your shares are really there.