DNA
Islamabad, Nov 23, 2020: Renamed Digital Custodian Company (DCC) Limited starts operations as a licensed Trustee/Custodian company under the NBFC regime of SECP, after the acquisition of MCB Financial Services Company by a consortium of ISE RMC and InfoTech Pakistan Limited.
DCC will operate as a subsidiary of Pakistan’s largest REIT Management Company – ISE RMC, and one of the country’s prominent IT companies – InfoTech Pakistan. The acquisition underscores the ambitions of the acquirers to transform the Company into an acclaimed FinTech Company with a focus on independent asset-holding, digital asset registry, smart contract arrangements and digital marketplace solutions using distributed ledger technologies.
As of now, the Trustee & Custodianship business in Pakistan is completely dominated by one entity, while the erstwhile MCB Financial Services Company had a very negligible market share in the segment. The total business potential of the segment is slightly about PKR one billion, which mainly comes from the mutual fund industry of Pakistan. Besides the capital market, the third party asset-holding business has a huge potential, and the market is poised for technological disruption. Furthermore, the pace of dematerialization and digitization of many conventional paper-oriented processes of the capital market & financial services through the offering of products such as; e-shares registry, demat insurance policies and smart loan/contract origination etc, is likely to gather momentum. With the Covid-19 pandemic realities forcing the financial regulators to fast-track the roll out of more & more enabling regulations for digital financial services, the future seems to belong to those companies, which have transformative ambitions. In this environment, the start of Digital Custodian Company augers well for the development of the country’s financial system, for which the SECP needs to be given due accolades.
Not only that the DCC aims to disrupt the industry through its modernistic plans, but the Company also has put in place a very formidable governance arrangement. DCC’s Board of Directors shall be chaired by Dr. Tariq Hassan, the former Chairman of the Audit Oversight Board and the Securities & Exchange Commission of Pakistan. The Board shall have two more independent directors, namely Mr. Ahmad Saeed and Ms. Maleeha Mimi Bangash, who have respectively been the former President of ICAP and former Member of Competition Commission of Pakistan. As per the acquisition agreement, DCC’s current management shall continue to lead the company, while the new acquirers are expected to add more hands-on guidance and innovation arrangements at the company.
It may be mentioned that ISE RMC, boasts its origin for being the country’s youngest Stock Exchange, established in 1989, which merged with two other stock exchanges in 2016 whereby Pakistan StockExchange (PSX) became the single and unified stock exchange of the country. ISE RMC has been part of all founding shareholders’ groups, which established JCR-VIS Credit Rating Agency, Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), Pakistan Mercantile Exchange (PMEX), Pakistan Institute of Corporate Governance (PICG), and Institute of Financial Markets (IFM). InfoTech Pakistan is the only IT company of the country, which has provided depository, trading, clearing, surveillance, central banking and citizen services related technology solutions to about two dozen capital/financial market institutions in South Asian, Middle Eastern and African markets.
