Kenya Introduces DhowCSD, a Central Securities Depository System

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Kenya has launched a state-of-the-art system known as DhowCSD, designed to enable traders in government securities across local, regional, and international financial markets to conduct electronic transactions.

The newly unveiled Central Securities Depository (CSD), initiated by Kenya’s central bank, offers registry, custodial, and settlement services for both primary and secondary market operations.

Accessible through an investor portal on the central bank’s website and a dedicated mobile app, DhowCSD streamlines the custody of securities and ensures secure updates of transaction statuses.

During the launch, Kenya’s President William Ruto emphasized that the platform would enhance the domestic capital market, encourage savings and investments, and deliver efficiency and speed without compromising security.

Ruto highlighted that investors would no longer need to physically visit the central bank for the manual process of opening a CSD account.

The government’s plan to eliminate trade barriers and foster the growth and stability of the financial market is solidified with the development of DhowCSD, Ruto stated.

A Central Securities Depository (CSD) is an institution responsible for holding financial instruments like bonds or equities, facilitating electronic transfers of ownership by maintaining electronic records.

The central bank deliberately chose the name ‘Dhow’ to symbolize the role that the CSD will play in Kenya’s financial and capital markets. The term ‘Dhow’ refers to the traditional wooden boat historically used to facilitate merchandise trading along the coasts of East Africa, Eastern Arabia, and South Asia.

The choice of name signifies that the new Central Securities Depository not only facilitates the trading of Kenyan Government securities locally and internationally but also promotes Kenya’s integration with international financial markets.

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