When opening a trading account with a Broker (Participating Organization) or a Bank, a CDS account will be opened at the same time. Normally, Brokers can offer Direct CDS or Nominee CDS Account but Banks can only offers Nominee CDS Account.
CDS stand for “Central Depository System” and it maintain by Bursa Malaysia Depository Sdn Bhd. Previously it was known as Malaysian Central Depository (“MCD”).
Each CDS account have its own advantage and disadvantage. Below are the different between the two:-
Direct CDS Account
Account Name - Under shareholder name (eg Mr Lee)
IPO application - Eligible
Paperwork on corporate exercise - Handle by shareholder
Dividend - Send to shareholder or eDividend
Attending AGM - Eligible
Annual Report - Mail to shareholder
Share transfer - To own or relative account
Nominee CDS Account
Account Name - Under Broker/Bank Name (eg CIMB Nominee Tempatan for/Pledged Securities Account for Mr Lee)
IPO application - Not eligible
Paperwork on corporate action - Handled by Broker/Bank
Dividend - Credited to trust/share account
Attending AGM - Not Eligible (but can get Broker/Bank to appoint as proxy)
Annual Report - Have to request from Broker/Bank
Share transfer - Only to own account
By looking at the above, it is clear that Direct CDS account have more advantage when compare to Nominee CDS account. The only advantage of Nominee CDS account is shareholder do not need to worry about paperwork on corporate exercise.