If you’re interested in investing in the Kenyan stock market, you’ll need to open a Central Depository System (CDS) account. A CDS account is a requirement if you want to buy and sell shares, bonds, and other securities on the Nairobi Securities Exchange (NSE). In this guide, we’ll walk you through the process of opening a CDS account in Kenya.
Without further ado here’s how to open a CDS account or a trading account:
Step 1: Choose a Stockbroker
The first step in opening a CDS account is to choose a stockbroker. A stockbroker is a licensed individual or firm that buys and sells securities on behalf of investors. You won’t be able to open a CDS account without a stockbroker, so take some time to research and compare your options.
To find a stockbroker, you can check the NSE website or ask for recommendations from friends and family. Once you’ve found a few potential stockbrokers, schedule meetings with them to discuss their services, fees, and trading platforms.
Also Checkout: Best stockbrokers in Kenya
Step 2: Gather Required Documents
Once you’ve chosen a stockbroker, you’ll need to gather the required documents to open a CDS account. The documents you’ll need include:
- A copy of your national ID or passport
- A copy of your KRA PIN certificate
- Proof of address (e.g. utility bill or bank statement)
- Two passport-sized photos
Make sure that the documents are up to date and valid. Some stockbrokers may also require additional documents, so be sure to ask them for a list of requirements.
Step 3: Fill Out the Account Opening Forms
After gathering the required documents, you’ll need to fill out the CDS account opening forms. These forms can be obtained from your stockbroker’s office or website. The forms will require you to provide personal information such as your name, contact details, and employment status.
You’ll also need to choose the type of CDS account you want to open. There are two types of CDS accounts: individual and corporate. An individual account is for personal use, while a corporate account is for businesses and organizations.
Step 4: Submit Your Application
Once you’ve completed the account opening forms, you’ll need to submit them to your stockbroker along with the required documents. Your stockbroker will verify your documents and information before submitting your application to the Central Depository and Settlement Corporation (CDSC).
The CDSC is the organization responsible for managing the CDS system in Kenya. They will review your application and notify your stockbroker if there are any issues or missing information.
Step 5: Activate Your CDS Account
After your application has been approved, you’ll need to activate your CDS account. Your stockbroker will provide you with a CDS account number, which you can use to log in to your online trading account.
To activate your account, you’ll need to deposit funds into it. The amount you need to deposit will depend on your stockbroker’s requirements. Once your account has been funded, you’re ready to start trading on the NSE.
Opening a CDS account is a straightforward process that can be completed in a few days. By following the steps outlined in this guide, you’ll be able to open a CDS account and start investing in the Kenyan stock market.
Remember to choose a reputable stockbroker, gather all the required documents, and fill out the account opening forms accurately. With your CDS account activated, you’ll be able to buy and sell securities on the NSE and watch your investments grow over time.