Section 5: Central depository not to be a member of an issuer, etc

5. Central depository not to be a member of an issuer, etc.— (1) Where a central depository is named in the register of members of an issuer, (a) the central depository shall be deemed not to be a member of the issuer; and (b) the persons named as the account‑holders or, as the case may be, the sub‑account holders shall, for such period as the book‑entry securities representing securities carrying voting rights in the issuer are entered against their names in the central depository register, be deemed to be members of the issuer in respect of such securities and shall, except as is otherwise provided in this Act, be entitled to all the rights, powers and privileges and be subject to all the liabilities, duties and obligations of a member as are or may be conferred by the Companies Ordinance, 1984, (XLVII of 1984) or by any other law for the time being in force or by the charter, statute or memorandum or the articles of association of the issuer. (2) Where a central depository is a debenture‑holder of an issuer or is the owner of securities of an issuer (whether equity securities or debt securities) which do not carry voting rights in the issuer,— (a) the central depository shall be deemed not to be the owner of such securities; and (b) the persons named as the account‑holders or, as the case may be, the sub‑account holders shall, for such period as the book‑entry securities representing such securities are entered against their names in the central depository register, be deemed to be the owners of such securities and shall, except as is otherwise provided in this Act, be entitled to all the rights, powers and privileges and be subject to all the liabilities, duties and obligations of the owners of such securities as are or may be conferred by the Companies Ordinance, 1984, (XLVII of 1984), or by any other law for the time being in force or in terms of any documents creating such securities. (3) Nothing in this Act shall be construed as affecting,— (a) the obligation of an issuer to keep a register of its members or debenture holders or allow inspections of such register under the provisions of the Companies Ordinance, 1984 (XLVII of 1984), or under any other law for the time being in force: Provided that the issuer shall not be obliged to enter in any registers maintained by it the names and particulars of persons who are members of the issuer under clause (b) of sub­section (1) or owners of the securities of the issuer order clause (b) of sub­section (2); (b) (i) the right of an account‑holder to request withdrawal of his securities from the central depository system at any time and, where applicable, to have them registered in his name, or where the account‑holder is a participant, in any other name; or (ii) the right of a participant to request a withdrawal of his sub‑accountholders securities from the central depository system at any time and, where applicable, to have them registered in the name of his sub‑account holder; or (c) the rights of a central depository to hold book‑entry securities beneficially in its own behalf. (4) Notwithstanding anything contained in this Act, an account‑holder or a sub‑account holder, who is named in the central depository register, at the close of business hours of the central depository on the day before the first day of the period of closure of register of members of an issuer as the holder of book‑entry securities representing securities carrying voting rights in issuer, shall be regarded as a member of the issuer for the purpose of attending and exercising all rights at a general meeting of the members of the issuer in respect of which the register of members has been closed. (5) Notwithstanding anything contained in this Act, an account‑holder or a sub‑account‑holder, who is named in the central depository register, as at the close of business hours of the central depository on the day before the first day of the period of closure of register of non‑equity securities of an issuer, as the owner of book‑entry securities representing such securities of the issuer, shall be regarded as an owner of such securities for the purpose of attending and exercising all rights at a general meeting of the owners of such securities of the issuer in respect of which the register of such securities has been closed.

Effective date: 1997-01-01

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