Central Securities Depository(short for: Central Depository) is an institution keeping unique records of legal securities holders and records of rights arising from such securities, as well as third party rights arising from the securities. Centralni securities depository also performs operations of clearing and balancing of the transactions concluded with securities, i.e. it performs transfer of ownership over securities and payment at the same time in order to prevent the situation of selling securities without receiving any money.
Central Securities Depository members can only be legal entities and namely broker-dealer companies, banks, fund management companies, stock exchanges, foreign clearing deposit organisations, as well as the Republic of Serbia and National Bank of Serbia.
Pursuant to the Law on Capital Market, rights of security holders are formed at the moment of registration of such securities on their account which is maintained at Central Depository. It means that security holders are entirely protected and completely capable of exercising their rights arising from securities only upon opening their securities account (ownership account) and upon registering such securities in the above mentioned accounts.
Request for securities registration at Central Depository can be filed by any interested person, whereat previously a contract must be concluded with a member of the Central Securities Depository (authorised bank or broker), representing that Depository. It means that the above procedure can be initiated both by the management of the company and shareholders, trustee, employees...
Any changes of the ownership over securities are recorded and performed through Central Depository (inheritance, pledge, gifts, legally binding judicial ruling, OTC trading..)
Dividend distribution is performed through Central Depository. Dividend is distributed as money or securities. Dividend payment is performed at the request of the issuer which is submitted through a member of Central Depository, bank or broker and along with which Decision of the Issuer on Dividend Payment is enclosed. Central Securities Depository transfers funds for payment to a member where sharedholder's ownership account is opened, and such funds are transferred by the member to the account of the shareholder at business bank This way it is not possible for the management of the company to make decisions to which shareholders dividend shall be paid and to which it shall not be paid, but all shareholders must be equally treated.
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