CCP Approves CDC’s Investment in NCMCL Under Competition Act Review

Approves CDC’s Investment in NCMCL

The (CCP) has approved the proposed investment by the Central Depository Company of Pakistan Limited (CDC) in Naymat Collateral Management Company Limited (NCMCL). This approval came after a Phase-I review conducted under the Competition Act, 2010.

CDC had submitted a pre-merger application to the Commission seeking approval for the subscription of additional ordinary shares in NCMCL. Following a competition assessment, the Commission authorized the transaction, allowing CDC to acquire additional shareholding in the company.

Established in 1993, CDC is one of Pakistan’s key capital market institutions providing electronic custody of securities, settlement facilitation and related depository services. NCMCL, incorporated in 2020, operates as a collateral management company responsible for warehouse oversight, verification and reporting services for commodities held as collateral.

Currently the only collateral management company registered with the Securities and Exchange Commission of Pakistan for accreditation and oversight of warehouses operating under the country’s Electronic Warehouse Receipt framework.

In its assessment, the CCP defined the relevant market as “collateral management and warehousing oversight services” within Pakistan. The Commission concluded that the deal would not significantly alter competition dynamics because the two companies operate in separate and unrelated business segments.

The Commission noted that the acquisition neither constituted horizontal nor vertical integration, reducing the likelihood of anti-competitive effects such as market foreclosure or collusion. It further concluded that the transaction would not create entry barriers or substantially lessen competition in the market.

The CCP formally authorized the transaction under Section 31 of the Competition Act, reflecting its commitment to facilitating investment and efficient market transactions while ensuring market competition and consumer welfare remain protected.