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What is the CDS - CDS ni nini?

CDS stands for the Central Depository System. This is a computer system operated by The Central Depository and Settlement Corporation (CDSC) that facilitates holdings of shares in electronic accounts, opened by shareholders and manages the process of transferring shares traded at the Stock Exchange.

CDS kwa urefu ni Central Depository System .Hii ni njia
kupitia tarakilishi inayotumiwa na Shirika la The Central
Depository Corporation ili kuhifadhi stakabadhi za hisa kwa njia ya
elektroniki na ambayo hufunguliwa na wenye hisa ili kusimamia
ubadilishanaji wa hisa katika soko la hisa.

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What is CDSC?

CDSC stands for the Central Depository and Settlement Corporation Ltd, a company incorporated under the Companies Act and approved to establish a central depository under the Central Depository Act, 2000.

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What is a depository?

A depository is like a bank, which holds securities (like shares, bonds, Government
Securities among others) for investors in electronic form. Besides holding securities, a
depository also provides services related to transactions in securities.

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Who are the shareholders of CDSC?

Capital Markets Challenge Fund Ltd


Nairobi Stock Exchange Ltd.


AKS Nominees Ltd


Capital Markets Investor Compensation Fund


Uganda Securities Exchange Ltd


Dar es Salaam Stock Exchange Ltd


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Who regulates CDSC?

The Capital Markets Authority (CMA)

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What are the benefits of CDS?

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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What is a CDS account?

It is an electronic account that holds shares only.

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Do I have to open a CDS account?

Yes, if you intend to trade in shares that are listed on the Nairobi Stock Exchange.  Soon, bonds will also be deposited into the CDS.

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What are the benefits of having a CDS Account?

  • Immediate transfer of securities
  • Elimination of risks associated with physical certificates such as bad delivery, fake securities among others
  • Reduction in paperwork involved in transfer of securities;
  • Reduction of transaction cost
  • Nomination facility
  • Change in address recorded when CDA gets registered electronically with all companies in which investor holds securities eliminating the need to correspond with each of them separately
  • Transmission of securities is done by CDA eliminating correspondence with the companies in which investor holds securities
  • Convenient method of consolidation of CDA accounts
  • Holding investments in equity, debt instruments and Government securities in a single account
  • Automatic credit into securities account, of shares, arising out of split or a consolidation or a merger among others.
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How do I open a CDS account?

By completing and signing a securities account opening/maintenance form with your CDA. The form is called CDS 1.

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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)

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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.

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What is a CDA?

CDA means Central Depository Agent. It is either a Stockbroker, an Investment Bank or a Custodian Bank who has been authorized by CDSC to open accounts in CDS on behalf of investors.

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Who are CDAs?

All licensed Members of the Nairobi Stock Exchange and Custodian banks are CDAs.

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Who is a Custodian?

A Custodian is an independent agency who holds the physical custody of the Financial Securities owned by an investor of the CDSC.

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Who is a Registrar?

A registrar is the entity that carries out share transfers, transmission and consolidation of shares of on behalf of a company and attends to queries relating to non-receipt of dividends on shares of the company.

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Will I be restricted to having an account with only one CDA?

No. There are no restrictions on the number of CDAs you can open accounts with.

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Will I have to keep any minimum balance of securities in my account with my CDA?

No. The depository has not prescribed any minimum balance. You can have zero balance in your account.

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Will someone else be able to operate my account on my behalf on the basis of a power of attorney?

Yes. If you authorize any person to operate your account by executing a power of attorney and submitting it to your CDA. This can be agreed upon  between your CDA and yourself.

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Will I be able to operate joint accounts?


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What happens to the certificates I already have?

You must open a CDS account and have the shares deposited into your account, otherwise you will not be able to trade in those shares.  The process is called immobilization of shares.

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What is the process of depositing shares?

  • Visit a CDA with the certificates you want to deposit.
  • Be sure you have already opened an account or are ready to do so.
  • You will be issued with and assisted to complete a Security Deposit Form (CDS 2).
  • Sign your form with the signature used when buying the shares.
  • Return the form to the CDA together with the certificates you have included on the form to be deposited.
  • You will be given a duplicate copy of the completed and signed form, after the CDA has countersigned as evidence of your deposit.
  • The CDA will forward the form and the certificate to the company's share registrar for verification
  • When the registrar confirms the certificates as genuine, they will forward the verified forms to CDSC and the shares will be deposited in your account.
  • Once the shares are in your account you can trade in them.
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What do I get to prove I have deposited shares into my CDS A/c?

  • You get the duplicate copy of the deposit form (CDS 2)
  • You get a monthly statement from CDSC if you have a trade that month.
  • You get a statement upon request.
  • The statements are issued directly to your email or postal address as indicated on the form.
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What do I do to change if I need to change my address?

You will complete and submit Securities Account Maintenance Form (CDS 1) to your CDA with the new address or indeed any other changed details.

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What if I want my certificate back?

Having completed the dematerialization process (where all shares were converted from physical into electronic form) you can no longer be issued with a share certificate but you can get a CDSC account statement as proof of your holdings .

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Can I use my shares as collateral/security for a loan?

Yes. You and the lender will complete a Pledge Form (CDS 5) and deliver it to your CDA. The lender will forward the forms to CDSC through your CDA. CDSC thus marks the shares as pledged to the lender and confirms this to the lender and yourself.  When shares are pledged you cannot sell them.

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How long does it take to process the Pledge?

Within 24 hours of the documents reaching CDSC.

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What if I had already pledged my shares to a bank/lender and left them my certificates?

You can agree with the lender to have the shares immobilized and immediately marked as pledged in the CDS.

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How does the pledge get removed from my account?

When you pay the loan, the lender completes the necessary Form (CDS6) instructing CDSC to remove the pledge.

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Will I be able to change the securities offered in a pledge?

Yes. If the pledgee [lender] agrees, you will be able to change the securities offered in a pledge.

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Will I receive dividend on the pledged securities?

The pledgor will continue to receive dividend on the pledged securities. The pledgee will get the benefits only if the pledge is invoked and on record date the shares are in the pledgee's account.

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When do I get a statement from CDS

If you have had activity in your account, you will receive a statement from CDS at the end of that month.

You can request for an interim statement of your account any time you wish. You will be charged a fee of Kshs.50 per interim statement.

It is mandatory to fill in your address, code and town on the Account Opening Form (CDS 1) in order for you to receive your statements promptly.

You view your statements on your mobile. To register, send the word Register to 22372 and you will receive instructions on how to register for the service. Each SMS costs Kshs.10.00

You can also get your statements via the email that you registered at the point of opening your account. If you didn't submit an email address or require to change it, please get in touch with your CDA . Email is free!

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Can I use a different Stockbroker from the one I have been using?

Yes, you can open accounts through as many stockbrokers as you want.  However, when an account is opened using one stockbroker, only that stockbroker can transact on that account

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How can I move from one Stockbroker to another?

By completing and signing the Securities Transfer Form, (CDS 4(A) + CDS 4(B) supplied to you by your stockbroker. The form must be signed also by your current CDA (CDS 4A) and your new CDA (CDS 4B)

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Will it cost me more to use CDS?

No. There is absolutely no increase in cost for the CDS accountholders.

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Do I lose my dividends and bonuses?

No, you will still get your entitlements without any change. Bonus shares are credited directly into your CDS account.

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How long does it take to complete a trade in CDS?

A maximum of 5 days. Your stockbroker can arrange for a shorter period if you want.

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How safe is CDS?

CDSC has taken measures to ensure the security of your shares. The company has offsite back up facilities and procedures that would ensure business continuity in the event of anything happening either to the computer system or its usual premises. CDSC has taken precautions to ensure its system is not interfered with.

CDSC has employed staff of high integrity and keep very high levels of confidentiality. Where appropriate and available the Company has taken insurance.

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Where can I ask any more questions about CDSC and CDS?

Please feel free to contact our helpdesk at

2229407 or 0724 256 130, 0733 222 033.

Or email us at

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What if I have any complaints about CDSC’s services?

Please write to us at or visit our offices at Nation Centre 10th floor.