A Central Depository System (CDS) account is a requirement for anyone looking to buy or sell securities on the Nairobi Securities Exchange (NSE) in Kenya.
The CDS is a computer-based system that facilitates the settlement of trades on the NSE and holds securities in electronic form.
In order to open a CDS account, one must follow a specific set of requirements.
The first requirement is that the individual must be 18 years or older. They must also provide proof of identification, which can be in the form of a national ID card, passport, or driving license.
In addition, they will need to provide proof of residence, which can be in the form of a utility bill, lease agreement or bank statement.
The next step is to choose a CDS account provider.
There are several providers in Kenya, including Central Depository and Settlement Corporation (CDSC), which is the main provider, as well as commercial banks, such as KCB, Equity Bank, and Co-operative Bank.
Each provider has its own specific requirements, but in general, the individual will need to provide a copy of their ID and proof of residence, as well as fill out an application form.
Once the account is set up, the individual will need to fund the account. This is typically done by depositing cash or securities into the account.
The deposit must be in Kenyan shillings and you will need to provide a deposit as proof of the deposit.
After the account is funded, the individual will be able to trade securities on the NSE. The CDS account is used to hold the securities in electronic form and to facilitate the settlement of trades.
The account holder will also be able to view their account balance and transaction history online.
It is important to note that opening a CDS account does not automatically mean one will be able to trade on the NSE.
The individual must also be a member of the NSE, which requires additional requirements such as passing a certification test and meeting certain financial requirements.
Summary
Opening a CDS account in Kenya is a requirement for anyone looking to buy or sell securities on the Nairobi Securities Exchange.
The process involves providing proof of identification and residence, choosing a CDS account provider, funding the account and meeting additional requirements to become a member of the NSE.
By following these requirements, one can take the first step towards participating in the Kenyan securities market.
