CDSC to start day trading in April after software upgrade

The Central Depository and Settlement Corporation (CDSC) is set to launch a new trading platform that will facilitate trades on the Nairobi Securities Exchange (NSE) to be settled in a day.

The move is expected to boost the liquidity of the capital markets, allowing investors to unlock the value of their investments faster.

Currently, trades on the NSE are settled in a minimum of three days.

CDSC Chief Executive Officer Rose Mambo said the system would be in place by April 2017, but brokers will be able to test the system from December to iron out the kinks.

“We’ll go live later this month and proceed with testing and integration with stockbrokers, the NSE and depository agents before we go live,” Ms Mambo said.

The system will also allow the CDSC and the Nairobi Securities Exchange to introduce new products and also allow trading of futures.

“We are setting out with a new mindset to consolidate the gains and milestones of the past and build a future for CDSC. We are looking at product diversification to ensure we serve multiple products and markets by leveraging on technology and service excellence,” she added.

CDSC’s current system can handle up to 30,000 transactions a day.

The Capital Markets Authority is expected to develop new regulations and guidelines before the system can go live.

Last month, CMA announced plans to introduce securities lending and borrowing which would investors to transfer their shares to buyers with a formal agreement on when the shares will be returned at a pre determined price.

Industry players have been pushing for same day settlement as it would boost market vibrancy.

Ms Mambo said CDSC would also address corporate governance to ensure idle investor accounts are not used for illegal trades.

“We are focused on sustaining robust risk management and corporate governance practices to achieve the highest standards of best practice in this area,” she said.

She was speaking during the unveiling of the company’s new corporate identity.