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Mandate of the Authority
The Capital Markets Authority is established by an Act of Parliament to promote, regulate and facilitate the development of an orderly, fair and efficient Capital Markets in Kenya.
 
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What do I need to know about CDs
As you may be aware, The Central Depository & Settlement Corporation Limited (CDSC) has commenced operations of the central depository system. The central depository system, procured from Millennium Information Technologies Limited of Colombo, Sri Lanka, was commissioned as ready for use on 10th November 2004. The commissioning meant that investors who hold or intend to hold shares listed on the Nairobi Stock Exchange (NSE) can now open electronic shares accounts through their stockbrokers or their custodian banks, and will henceforth trade through those accounts rather than in paper certificate form, as was previously the norm. The implementation of the Central Depository System is a truly national project and the benefits accruing from its success will be beneficial to all Kenyan investors. It will radically change how business is done at the stock exchange and it is therefore critical that the public understands its operations. We would thus like to take this opportunity to address the key issues regarding the CDS operations and processes as well as respond to the concerns that investors and potential investors may have regarding trading in a paperless environment.

WHAT IS THE CDS?

CDS stands for the Central Depository System. This is a computer system that facilitates holding of securities in electronic accounts and facilitate faster and easier processing of transactions for NSE securities (shares and bonds)

HOW DO I OPEN A CDS ACCOUNT?

By completing and signing a securities account opening/maintenance form with your Central Depository Agent (CDA), providing two recent passport size photographs and a photocopy of your national identity card.

WHO IS A CDA?

A CDA is a central depository agent, either a stockbroker or a custodian bank, who has been authorized by CDSC to open accounts in CDS on behalf of investors. This is a list of authorized CDA’s at the moment;

 NAME  LOCATION  TELEPHONE

STATUS

 Francis Drummond & Co. Ltd.

Hughes Building, 2nd Fl.

318690

 

 Dyer & Investment Bank Ltd.Loita House, 10th Fl227803

 

 Francis Thuo & Partners Ltd.International House, 13th Fl.226531

Suspended 

 Nyagah Stockbrokers LtdNation Centre, 12th Fl315628

Suspended

 Kestrel Capital (EA) Ltd Hughes Building, 7th Fl251758

 

 Ngenye Kariuki & Co. Ltd Travel (UTC) House, 5th Fl 224333

 

 Suntra Investment Bank Ltd Nation Centre, 10th Fl 223330

 

 Reliable Securities Ltd Standard Building, 3rd Fl 241350

 

 CFC Financial Services Ltd Corner House, Ground Fl221452 

 

 Discount Securities Ltd International House, 3rd Fl 219552

Suspended 

 African Alliance Kenya Ltd Kenya Re Towers, 4th Fl 2735013

 

 Ashbhu Securities Ltd Finance House, 13th Fl 210178

 

 Crossfield Securities Ltd IPS Building, 5th Fl 246036

 

 Apex Africa Investment Bank Ltd Rehani House, 4th Fl 242170

 

 Faida Securities Ltd Windsor House, 1st Fl 243811

 

 Solid Investment Securities Ltd Contrust House, 6th Fl 244272

 

 Standard Investment Bank Ltd Hazina Towers, 17th Fl 220225

 

 Stanbic Bank Ltd Stanbic Bank Building 342711

 

 Kenya Commercial Bank Kencom House 248912

 

 Barclays Bank of Kenya Ltd Barclays Plaza 241270

 

 NIC Bank Ltd NIC Bank House,Upper Hill  2719199

 

WHAT DO I NEED TO OPEN A SECURITIES 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. You need to sign the form before your 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. Please keep your CDS account number confidential.

WHAT DO I DEPOSIT IN A CDS ACCOUNT?

Shares. From time to time CDSC and NSE will notify the public through the press of shares which have been chosen for depositing in CDS accounts. Sometime this year, the CDS will be open for depositing of bonds.

MUST I OPEN A CDS ACCOUNT?

Yes, if you intend to trade in shares, which have been selected for depositing.

CAN I USE A DIFFERENT BROKER FROM THE ONE I HAVE BEEN

USING?

Yes, you can use as many brokers as you want. You will need to open a CDS account with each broker you wish to use.

HOW CAN I MOVE FROM ONE BROKER TO ANOTHER?

By completing and signing the Securities Transfer Form, supplied to you by your broker. The form must be signed also by your current CDA and your new CDA. If your deposit your shares through a custodian bank, you can use any broker without need to transfer the shares.

WILL IT COST ME MORE TO USE CDS?

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

WHAT IF THE COMPUTER AT CDSC HAD A PROBLEM?

CDSC has offsite back up facilities and contingency measures to ensure data will not be lost, and to ensure business continuity.

WHAT IS THE PROCESS OF DEPOSITING SECURITIES?

  • Visit a CDA with the certificates you want to immobilize.
  • 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.
  • 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 CDSC
  • CDSC will forward the certificates and forms to the company’s shares registrar for verification.
  • When the registrar confirms the certificates as genuine, the shares will be deposited in your account.
  • Once the shares are in your account you can trade in them.

WHAT DO I GET TO PROVE I HAVE DEPOSITED SECURITIES?

  • You get the duplicate copy of the deposit formy
  • ou get a monthly statement if you have a deposit or a trade that month.
  • You get a quarterly statement if you have not had a trade for three months.
  • The statements are issued directly to your address as indicated on account opening the form.

WHAT ARE THE BENEFITS OF CDS?

CDS assures you of faster safer 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.

DO I LOSE MY DIVIDENDS AND BONUSES?

No, you will still get your entitlements without any change.

HOW LONG DOES IT TAKE TO COMPLETE A TRADE IN CDS?

5 days, from beginning to end.

WHO REGULATES CDSC?

The Capital Markets Authority

HOW SAFE IS CDS?

CDSC has taken measures to ensure the security of your shares. The company has 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.

WHERE CAN I ASK QUESTIONS ABOUT CDSC AND CDS?

Please feel free to contact/visit the Central depository and settlement corporation (CDSC) on 10th Floor, Nation Centre, Kimathi Street.

Telephone No. 253077/8/

 
Highlights
AUTHORITY APPROVES A BONUS ISSUE BY JUBILEE HOLDINGS LIMITED.

The Capital Markets Authority (CMA) has granted approval toJubilee Holdings Ltd for the issue of bonus shares in the ratio of one (1) new ordinary share for every ten (10) ordinary shares held as at close of business on June 14, 2010, and their subsequent listing  on the Main Investment Market Segment of the Nairobi Stock Exchange. This will result in an additional 4,500,000 ordinary shares of a par value of Kshs. 5.00 each to the shareholders of Jubilee Holdings Limited.

 “In approving the bonus issue and listing of the additional shares, the Authority has considered the application by Jubilee Holdings Ltd and is satisfied that it meets the requirements of the Capital Markets Act 485(A) and Regulations issued there under.” Said CMA Chief Executive, Mrs. Stella Kilonzo.  

Read more...
 
Appointment Of Transaction Advisers
The Capital Markets Authority wishes to draw the attention of all licensees and members of the public to the provision of Regulation 5A of the Capital Markets (Public Offer, Disclosure and Listing) Regulations 2002 which came into effect on June 11, 2009 and which provides as follows:
  • Any company proposing to offer its securities to the public or a section of the public shall appoint a transaction adviser.
  • A transaction adviser appointed under paragraph (1) shall be responsible for ensuring that the offer of securities is made in accordance with the Act and regulations issued thereunder.
  • A person shall not be eligible for appointment as a transaction advisor unless such a person is licensed as an investment bank or is approved by the Authority to act as a transaction advisor for the particular offer of securities.
In accordance with this provision, ALL issuers of securities to the public are required to appoint a Transaction Adviser that is licensed as an Investment Bank or in the alternative, prior to appointing a transaction adviser that is not a licensed Investment Bank, to seek the Authority’s approval of such a person.

Kindly note that that save for Investment Banks, all persons seeking to act as transaction advisers shall be required to seek prior approval from the Authority before they are considered eligible to act as a transaction advisers.

The Authority may consider the appointment of a joint team of transaction advisers provided that the same comprises a licensed Investment Bank.

Read more...
 
Renewal Of Capital Market Licences For The Year 2010

The attention of the Capital Markets Authority has been drawn to an erroneous report that appeared on the Tuesday May 11th 2010  Standard Newspaper’s , Financial Journal section, Page 9 titled ‘Will CMA renew brokers licences?’.


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CAUTIONARY STATEMENT

The public are advised to be wary of and to avoid giving money to companies that hold themselves out as carrying on the business of Investment Advisers or any other licensed activity without holding valid licenses issued under the Capital Markets Act.

The public should note that the Capital Markets Act (Cap 485A) and regulations prohibit any company from carrying on the business of a licensed person without the requisite licence.  A list of all persons holding a license from the Authority is available on the website of the Authority (www.cma.or.ke) and investors should not hesitate to contact the Authority for any clarifications on the same.

The Authority shall take appropriate action against any unlicensed persons that carry on or hold themselves out as carrying on the business of a licensed person. In this regard the Authority specifically warns the public over any dealings with the following entities:

1.    Caribbean Stocks
2.    Caribbean Solutions Finders Limited
3.    Orgacilla Merchants

We would like to take this opportunity to request the public to provide the Authority with any information on any such unlicensed persons to enable us to take action in the interest of investors.

Investors with queries or complaints may also contact the Capital Markets Fraud Investigation Unit on  0714 693414, 0714693365, 0731544389, 0733199622 or by email on This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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The CMA Fraud Investigation Unit (CMFIU) arrests an Investment Advisor

The Capital Markets Authority (CMA) Fraud Investigation Unit (CMFIU) investigations has led to the arrest of an investment advisor licensed by CMA. The accused, Mr. David Chege Mworia is a Director of Prudential Capital Ltd which is an investment advisory firm licensed by the Authority. He was a former employee of Ngenye Kariuki and Company Ltd currently under Statutory Management.

Read more...
 
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