Central Depository System Account

Central Depository System Account (CDS)

CDS is offered by the Central Depository & Settlement Corporation Limited (CDSC).

Introduction:

The Central Depository & Settlement Corporation Limited (CDSC) is a limited liability Company approved by the Capital Markets Authority to provide automated clearing, delivery and settlement facilities in respect of transactions carried out at Nairobi Securities Exchange as well as holding of listed and non listed securities including other documents of title on behalf of investors.

Incorporation:

The Central Depository & Settlement Corporation Limited (CDSC) was incorporated on 23rd March 1999 under the Companies Act, 2000. CDSC formally started operations on 10th November 2004.

Nature Of Business:

The business of the Company is to establish and operate a central depository system and provide central clearing, settlement and depository services for securities initially in Kenya in respect to securities listed on the Nairobi Stock Exchange. The central depository system provides a centralized system for the transfer and registration of securities in electronic format without the necessity of physical certificates.

How to open a CDS account:

If you intend to trade in shares that are listed on the Nairobi Stock Exchange. You first need to open a CDS through a CDA(Stockbroker, Investment Bank or a Custodian).

How to Open a CDS account.

By completing and signing a securities account opening/maintenance form with your CDA. The form is called CDS 1.The CDS is an electronic account that holds shares. All licensed Members of the Nairobi Stock Exchange and Custodian banks are CDAs.

WHAT DO I NEED TO OPEN A CDS ACCOUNT?

You need two recently taken passport size photographs, original National ID or passport. In the case of a company you need the original certificate of incorporation, and if you are an organization registered in any other way you need the certificate of registration. Directors of a company will also need to provide their ID Cards and passport size photographs. You need to sign the form (CDS 1) before your Central Depository Agent (CDA)

WHAT DO I GET WHEN I OPEN AN ACCOUNT?

You will obtain from your CDA a CDS account number together with a duplicate copy of the account opening form for your records. You will also agree a secret question and answer with your CDA for purposes of identifying you. Please keep the question and answer confidential.

BENEFITS OF A CDS ACCOUNT.

CDS assures you of safer faster and easier trading in your securities. You do not have to wait for the issue of certificates before you can trade again as your shares are credited to your account 5 days after the date of trade.

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