How to Open a CDS Account in Kenya

A Central Depository System (CDS) Account is an electronic account specifically designed to hold shares and bonds that can be traded through the Nairobi Stock Exchange (NSE).

To open a CDS account, individuals or corporate entities have several options, they can do so with: 

• The Central Depository and Settlement Corporation Limited (CDSC), 
• The Central Bank of Kenya (CBK), or 
• Approved Central Depository Agents (CDAs) such as stockbroker, investment bank, or custodian bank. 

• Kenyans residing abroad who maintain a local (Kenyan) commercial bank account are eligible to apply directly for a CDS account at the Central Bank of Kenya (CBK). 
• Non-Kenyans and Kenyans without a local commercial bank account can still participate in investing in Kenyan government securities. They can do so as nominees through authorized CBK agents, which include;
1. Commercial banks,
2. Investment banks, and 
3. Stock brokers based in Kenya.

1. CDS Accounts for Individuals/Joint Accounts

To open your individual CDS account, you will need to provide the following documentation:

1. A recent colored passport-size photograph of the account holder. Ensure that the reverse side of this photograph is certified by your banker and stamped. Please do not staple or glue it to any card.
2. An original and clear copy of your national identity card, passport, or alien certificate for verification purposes.
3. An original and clear copy of your Kenya Revenue Authority PIN (KRA PIN).
4. A completed email indemnity agreement form, which must be witnessed by another individual.

2. CDS Account Opening for Corporate/Companies

For companies, you will need;

1. Board Resolution letter authorizing the opening of a CDS account.
2. The original certificate of incorporation; organizations registered in other ways require a certificate of registration.
3. Company directors must provide their ID cards and passport-size photographs.
4. List of authorized signatories with specimen signatures
5. The form (CDS 1) needs to be signed before your Central Depository Agent (CDA).

3. CDS Account for Minor

To open a CDS account for a minor, the following documents are required:

1. The ID or passport of the guardian or parent.
2. One recently taken passport photo each for both the minor and the parent/guardian.
3. The minor's birth certificate or passport.
4. A certified copy of the KRA PIN certificate belonging to the guardian or parent.
5. A certified copy of a tax exemption certificate, if applicable.
6. If you are not the parent, guardianship orders must be provided to establish legal authority over the minor's affairs.

1. Choose a Central Depository Agents (CDAs)

A Central Depository Agents (CDAs) is a financial institution authorized to open and maintain CDS accounts on behalf of investors.
Select a reputable Central Depository Agents, such as;

1. Commercial banks,
2. Investment banks, and 
3. Stock brokers based in Kenya.

READ MORE : A list of approved Stockbrokers and Custodian Banks

2. Opening a CDS account with the Central Depository & Settlement Corporation Limited (CDSC) 

Gather Required Documents:

• Valid identification (National ID or passport)
• Two passport-sized photographs
• Proof of address
• Completed CDS 1 form (available from your CDA or the CDSC website)

3. Opening CDS account with the Central Bank of Kenya (CBK)

To open a CDS account with the Central Bank of Kenya, begin by deciding whether you want a single account, joint account or a corporate account.

1. Download and print the appropriate mandate card from the CBK website. Use the Mandate Card (Individual) for individual investors and Mandate Card (Corporate) for corporate investors.
2. Fill out the card using clear block letters, ensuring your handwriting is neat and legible. Write your name exactly as it appears on your national identification document.
3. Attach a recent colored passport-size photograph along with a copy of your Kenyan National Identity Card (ID) or Passport. These documents must be certified by a local commercial bank in Kenya.
4. Have your completed CDS mandate card certified by your commercial bank, which will stamp it and have two authorized signatories append their signatures in the designated space.
5. Scan and email the completed CDS mandate card to ndo@centralbank.go.ke, or send it along with attachments via post to: The Director, Financial Markets Department, P.O. Box 60000-00200, Nairobi, Kenya

Once your CDS account is opened, you will receive notification of your CDS account number via email as provided on the submitted mandate card, followed by an official letter of notification.

Generally, there is no charge for opening a CDS account itself. However, the costs associated with opening a CDS account in Kenya can vary based on the Central Depository Agent (CDA) you select.

Here's an overview of potential expenses:

1. Direct Costs

• CDA Fees: Some CDAs may impose fees for opening and maintaining a CDS account, which can vary among different agents.
• Brokerage Fees:These can vary widely between brokers; comparing fees and services is advisable before selecting one.
• Transaction Fees: When buying or selling securities, transaction fees such as brokerage fees, CDSC levies, and other charges typically apply. These are usually calculated as a percentage of the transaction value.

2. Indirect Costs

• Stamp Duty: Depending on the securities traded, stamp duty may be applicable.
• Capital Gains Tax: Profits from selling securities might be subject to capital gains tax.

For precise and current cost details:

• Contact your chosen CDA for comprehensive information about their specific fees and charges.
• Consult with your broker to understand the fee structure related to their services and obtain a detailed breakdown of transaction costs.

Central Depository and Settlement Corporation (CDSC)

Central Bank of Kenya (CBK)

Individual or Joint Account Opening Form

Corporate Account Opening Form

Minor Account Opening Form