Are you aware CDSC offers more services than you may imagine?

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

The main mandate of the organisation is to provide efficient and secure Depository, Clearing and Settlement services for all securities listed on the Exchange.

CDSC has several other products and services that offer different solutions. This article outlines them.

CDS Account Opening and Maintenance

To participate in the Kenyan Capital Markets, you need a CDS Account. CDSC, through appointed Central Depository Agents (CDA), opens and maintains accurate investor information in the Central Depository System (CDS).

Shares Transfer (own-account and private transfer)

Investors who need to consolidate their shareholding information under one CDA, or wish to split their shares portfolio, can do so through our shares transfer service. CDSC also facilitates private transfer for investors who wish to gift their loved ones with shares. Shares gifting applies only to close relatives. Further, CDSC facilitates the transfer of shares in deceased cases, to the appointed beneficiaries.

Shares Immobilisation

The Kenyan capital market is fully dematerialised. This means that investors who are still holding paper certificates cannot sell or transfer them without first converting them to electronic format in the CDS. We facilitate the share conversion process (immobilisation) through Registrars and Central Depository Agents.

Share Pledging and Releasing

Investors can use their shares as collateral to access credit facilities in the form of loans from financial institutions. The shares are pledged in favour of the lender until the loan is cleared, after which the pledge can be lifted and shares released back to the investor.

Provision of Entitlement Schedules to Issuers and Registrars

CDSC, as the official holder of investor data, provides entitlement schedule to issuers and registars to facilitate corporate actions like dividend payments, bonus shares, and rights issues.

Securities Lending and Borrowing (SLB)

This is the temporary transfer of securities (shares) from one party (the lender), to another (the borrower), at an agreed lending/borrowing fee, with a formal agreement to return the securities either on-demand or at a future pre-agreed date. Lenders enjoy positive returns in form of interest income from the lending fees charged, while borrowers make a return by engaging in trading strategies such as short selling.

Capital Markets Guarantee Fund Management

The Guarantee Fund is a facility set up to ensure financial integrity in the securities market. It is a mechanism managed by CDSC to ensure that trades will be settled among our Central Depository Agents (i.e. the selling CDA will deliver the securities and the buying CDA will effect payment). CDSC prudently manages the Guarantee Fund through appointed tier-one commercial banks.

Online Account Access through Digital Channels

CDSC offers investing customers multiple, secure, and efficient channels for accessing their shareholding information and CDSC services. Some of these digital solutions include the CDSC application, email statement service and the CDSC Chatbot in the Rhino Application.