If you wish to invest in government securities or buy shares, you need to open a CDS account. There are various ways you can open a CDS account in Kenya. You can open one through the Central Bank of Kenya, commercial banks, or third parties like stockbrokers. An individual or an entity like a company can open a CDS account.
What is a CDS Account?
A Central Depository System (CDS) account is an electronic account that is used to hold and facilitate the exchange of shares, or government securities like bonds. A CDS account acts as a holding or a trading account. It is mandatory to have a CDS account if you wish to trade in Government securities in Kenya.
Requirements for Opening CDS account in Kenya
You need to meet the following requirements for opening a CDS account.
- You must be 18 years or above
- Two colored passport sized photographs
- Original copy of ID or passport
- A duly filled and signed CDS 1 form by two bank signatories. It acts as evidence that you have a bank account
- In the case of a company, a certificate of registration
- In the case of a company, copies of directors’ national IDs or passports and photos
Cost of Opening a CDS Account in Kenya
It’s free to open and maintain a CDS account through the Central Bank of Kenya. However, you may be required to pay a fee to open and maintain a CDS account if you use third parties like stockbrokers.
You can open a CDS account as an individual or a joint group. A CDS account can have an individual’s name or that of an entity like a bank or a company.
How to Open a CDS Account in Kenya
You can open a CDS account through the Central Bank of Kenya, Commercial Bank, or third parties like stock brokers.
How to Open a CDS Account with Central Bank of Kenya
To open a CDS account through the Central Bank of Kenya, follow the following simple steps.
- Visit any of the Central Bank of Kenya branches across the country.
- Request for a CDS account specimen signature mandate card
- Fill the signature mandate card in block letters. Do not fold it or make errors.
- Make sure to write your names in the order they appear on your ID card
- Submit the card to the CBK officer and sign it in his presence
- Submit the required documents like copies of your ID, passport photos, and two signatories from your bank institution
- The CBK officer will verify all your documents and certify them at the back
- You will then need to wait for 7 business days so that you can have your CDS account
How to Open a Diaspora CDS Account in Kenya
If you are a Kenyan living outside the country, you can open a CDS account following these simple steps.
- Visit the Central Bank of Kenya website
- Select whether you are opening an individual or corporate CDS account
- Print the mandate card and fill in your details
- Attach a colored passport size photo and a copy of your ID or passport
- Have the CDS mandate card certified by your commercial bank
- Scan the completed CDS mandate card and send it to email@example.com
- Send the physical mandate card and other attachments via post to Director, Financial Markets Departments, P.O Box 60000-00200, Nairobi.
- Once your CDS account is opened, you will receive a notification through the email address you provided in the CDS mandate card. You will also receive a formal notification letter confirming your CDS account.
Summary of How to Open a CDS Account in Kenya
You need a CDS account to trade in government securities or trade in shares. You can open a CDS account in Kenya through the Central Bank of Kenya, commercial banks, or using third parties like stockbrokers. It is free to open and maintain a CDS account through the CBK. If you use third parties, you may require to pay a fee to open or maintain one.