Kenya has launched a new system named DhowCSD that allows traders in government securities in local, regional and international financial markets to transact electronically.
The new Central Securities Depository (CSD) launched by Kenya’s central bank on Monday, provides registry, custodial and settlement services for both primary and secondary market operations.
Situated at the central bank’s website on an investor portal, as well as on a mobile app, facilitates centralised custody of the securities and the secure updating of the status of transactions relating to them.
Kenya's President William Ruto said at the launch that the platform will deepen the domestic capital market and promote savings and investments while also delivering efficiency and speed without compromising security.
He said investors will no longer have to physically present themselves at the central bank to undergo the manual process of opening a CSD account.
“The development of DhowCSD cements the government’s plan to eliminate barriers to trade,” a statement from his office cited him as saying at the launch. “It will also foster the growth and stability of our financial market.”
A CSD is an institution that holds financial instruments such as bonds or equities and allows electronic transfers of ownership of those instruments by updating electronic records.
The name ‘Dhow’ was deliberately adopted to signify the role that the CSD will be playing in Kenya's financial and capital markets, the central bank said in a statement.
The ‘Dhow’ refers to the traditional wooden boat, which was used to facilitate the trading of merchandise along the coasts of East Africa, Eastern Arabia and South Asia, it said.
"The name, therefore, fits the new Central Securities Depository in the sense that the CSD serves to facilitate, not just the trading of Kenya Government securities locally and across the border, but also facilitates the integration of Kenya with international financial markets," it said.
(Editing by Seban Scaria firstname.lastname@example.org)