Unfortunately, due to the lack of competent human resources, the CDBL has not realised its full potential to deliver an efficient and seamless de-materialisation of the listed scrips. As a result, it has opened ways for a section of participants of the capital market, be it a listed company or a broker, to deceive innocent investors. This was evident in the recent 'scam' (as reported in the dailies last week) involving BD Welding (a listed company).

I am not in a position to comment on the events, but I can safely say that it would have not been possible for the perpetrators to carry out such a scam if BD Welding shares were dematerialised. On the other hand, it would have been very easy to trace the trading activity to identify the culprits had the shares of BD Welding been dematerialised.

It goes to say that even after three years in operation, the CDBL is yet to bring all the listed companies under the de-mat system, thus giving rise to confusion amongst investors and in settlement of trades.

My father, a retired government official, recently asked me to see why his broker was unable to sell his holdings of Beximco Pharma. When I contacted the broker, I was surprised to hear that my father was holding 'odd lot' shares for a stock which has been de-materialised (de-mat). Under a de-mat system there is no such thing as 'odd lot' for the simple basic fact that there is no 'lot' as the share certificates are replaced by electronic processing of trades based on transaction amount giving equal value to all shares per unit of 1.

In other words, someone wishing to buy Tk 5,000 worth Beximco Pharma at a market price (let's say Tk 51) should get 98 units. Likewise, an investor holding 98 units of Beximco Pharma should be able to sell 98 units at a market price just as someone who is holding 100 units (assuming enough market depth to satisfy order, and no transaction costs).

I am certain that there are many innocent shareholders stuck with the same fate as my father. CDBL needs to eliminate this 'lot system', that is responsible for inefficient trading and unnecessary losses suffered by many shareholders who happened to be holding units that were not divisible by a nice round figure of 10,50, or 100.

One of the biggest benefits of a central depository system is that it gives instant information regarding shareholders stake in any listed companies. I know for a fact that there are many sponsors who are running management without having a controlling stake in their companies. In some instances the holdings of some of these companies are as little as 10 percent whilst individuals or institutions holding more are kept on the sidelines simply because of the unavailability of information.

CDBL and/or the stock exchanges should make this information available frequently so that the investors are aware of such instances which should make trading more interesting should certain investors find the stock undervalued. In addition, this information helps the SEC monitor 'insider trading' more efficiently and accurately. Rampant and unabated 'insider trading,' an open secret of our stock exchanges, needs immediate attention.

The writer is a financial market professional