Do you want to add another passive income stream to your sources of income? Investing in the stock market can be a very profitable business venture that you can start today.
In this blog post, you will learn how to open a CDS account in Kenya to start trading and or investing in the Nairobi securities exchange.
This post will explain everything you need to know about the central depository system and how you can open and use one in Kenya.
What’s the capital markets authority?
According to the CMA website; The Capital Markets Authority is an independent public agency established by an Act of Parliament, Cap 485 A under The National Treasury and Planning.
The Authority came into being on December 15, 1989 when the Act was passed and was inaugurated in March 1990.
The CMA is a regulating body charged with the prime responsibility of supervising, licensing and monitoring the activities of market intermediaries like;
1; stock exchange
2; central depository and settlement system
3; persons licensed under the Capital Markets Act.
The capital markets authority plays a critical role in the development of the economy by facilitating the morale of the investors in Kenya to invest into the economy.
What’s is the central depository and settlement corporation limited (CDSC)?
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.
According to the the CDSC website; “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.”
Why should you have a CDS account?
The CDS account is like your savings account, it’s your wallet that you can store all your shares in Kenya.
When you buy shares, they will be transferred directly to your CDS account. The same is true for when you want to sell the shares.
With a CDS account, instances of errors and frauds are minimized and taken out of the picture.
Managing your balance is as simple as clicking buttons as you have your money in one central place.
What do you need in order to open a CDS account?
To open a CDS account, you will need the following basic documents;
1; National ID card
2; coloured passport sized photos
The two are the documents that you should have before you go to the bank to register for a CDS account in Kenya
What is the procedure of obtaining a CDS account?
To obtain a cds account in Kenya, you must follow the two steps outlined in this post, I have reduced the steps into two for simplicity.
a; Obtain the special specimen signature mandate card
The first step to obtaining a CDS account is to get a special specimen signature mandate card from the central bank of Kenya.
You can visit any central bank branch in Kenya and ask the cashier to give you the specimen signature mandate card.
The central bank of Kenya branches are in Major cities and towns in Kenya like Mombasa, Eldoret, kisumu, thika, Nakuru amoung others.
b; Fill in the required information
Once you have obtained the special specimen signature mandate card, fill in the required information in block format ensuring that there is no alterations.
Sign the card in the presence of a bank officer and submit the fully filled documents to the bank with the above mentioned documents.
After going through all the process of opening a cds account in Kenya, you will have to wait for atleast seven days to obtain your CDS account.
For residence in diaspora, there is a different procedures that they should follow in order to obtain a CDS account in Kenya. I will be showing you how to go about it if you are from diaspora in the future posts.
You can open a CDS account with the central bank of Kenya or with the licensed brokers and pay a monthly maintenance fee of ksh 100.
The world have moved on very fast to the extent that having CDS account, is a measure of your luck of aggressiveness.
With a CDS account, you will be investing your money passively as a way of accumulating wealth.
Do you have a CDS account? Do you plan to get one soon? What have been your experience with a CDS account? Drop your comment and let the conversation Flow.