CCP approves CDC investment in Naymat Collateral Management Company

The Competition Commission of Pakistan on Monday approved the proposed investment by Central Depository Company of Pakistan Limited in Naymat Collateral Management Company Limited after completing a Phase-I review under the Competition Act, 2010.

According to the CCP, CDC submitted a pre-merger application under Section 11 of the Act seeking approval to subscribe to additional ordinary shares in NCMCL.

Following a competition assessment, the commission authorised the transaction, allowing CDC to increase its shareholding in the company.

CDC, established in 1993, provides electronic custody of securities, settlement facilitation and other depository services in Pakistan’s capital markets.

NCMCL, incorporated in 2020, operates as a collateral management company responsible for warehouse oversight, verification and reporting services for commodities held as collateral.

The CCP noted that NCMCL is currently the only collateral management company registered with the Securities and Exchange Commission of Pakistan for accreditation and oversight of warehouses operating under Pakistan’s Electronic Warehouse Receipt framework.

In its assessment, the commission defined the relevant market as “collateral management and warehousing oversight services” in Pakistan.

The CCP concluded that the transaction would not significantly alter competition dynamics because both companies operate in separate and unrelated business areas.

According to the commission, the acquisition does not involve horizontal or vertical integration and is therefore unlikely to create anti-competitive effects such as market foreclosure or collusion.

The commission further stated that the transaction would not create barriers to entry or substantially reduce competition in the market.

The CCP formally authorised the deal under Section 31 of the Competition Act, saying the decision reflected its approach of facilitating investment and market transactions while protecting competition and consumer welfare.