How to open a CDS account in Kenya

  Banking

Central Depository System account allows individuals to trade in stocks. Regardless of where and how you purchased your stocks, they are often traded in your CDS account which is run by Central Bank of Kenya.

What is a CDS Account?

Trading in stocks involves buying and selling of shares. Granted the frequency and constant money transfer, investors both long term and speculative ones are required by law and central bank rules to operate a CDS account. It is analogous to a bank savings account that allows you to deposit or withdraw. In the case of CDS to purchase or dispose of shares. It is from your CDS account that your stock broker can execute your instructions to buy or sell.

Where can I open a CDS account in Kenya?

You go directly to Central bank and open a CDS account or use proxy through stock brokerage firms, commercial banks, investment banks and advisors that can open one for you. They can be opened for both individual and entities like companies, institutions banks etc.

How much does it cost to open a CDS account in Kenya?

Central Bank of Kenya charges no fee on opening a CDS account.

Here is a guide on how to open one if you opt to go to central bank.

  • Go to any of the Central bank branches in the county (Kisumu, Nairobi and Mombasa and Eldoret)
  • If you are not near any of these you can opt for currency centers in Meru, Nyeri, and Nakuru
  • Ask the Cashier for a Specimen signature mandate card
  • Fill the card with accurate information required block letters
  • Return the completed card back to the cashier
  • Sign the card with your specimen signature in the presence of the cashier or authorized agent
  • Submit the completed mandate card with coloured passport photo, Original copy of your ID or passport, and photocopies of each.
  • The bank cashier or agent will verify the documents and stamp the photo before appending it to your mandate card
  • The final step is submitting two signatories from your financial institution verifying your specimen signature and bank accounts details.

Opening a CDS for individuals living in diaspora

  • Go to centralbank.go.ke
  • Select whether individual or corporate form
  • Print out the mandate card
  • Fill in accurate details
  • Attach recent coloured passport photo
  • Attach a copy of your National ID or passport
  • Your local commercial bank will verify your details, specimen signature and certify your CDS mandate card
  • Scan the verified copy and send to ndo@centralbank.go.ke
  • Send the physical mandate and attachments by post to The Director, Financial Markets Department P.O. Box 60000- 00200, Nairobi, Kenya
  • Wait for confirmation of the opening of the CDS account via email(which you provided in your mandate card)
  • After this a notification letter will be sent to you to confirm your CDS account.

Using proxy or Third party to open CDS account

Alternatively, you can go to a licensed stock broker, commercial bank or investment bank to open a CDS account. While some of these entities may charge for this service e.g. ksh 100 monthly maintenance fees. Ensure you have all the necessary documentation and proof of identity when approaching these institutions or individuals. Ensure that the third party you open CDS account with are listed and licensed by Central Bank of Kenya and recognized by Capital Markets Authority.

It takes seven working days to process CDS application.

There you have it a step by step account on how to open a CDS account in Kenya for both individual and corporates. Kenyans in the diaspora aren’t also left behind by central bank.