Transcript No Slide Title

The Central Depository &
Settlement Corporation Ltd.
AMEDA
CONFERENCE
SUN CITY, SOUTH
AFRICA
24TH OCTOBER 2008
ROSE MAMBO
Chief Executive
Central Depository & Settlement Corp.
Limited
THE KENYAN CAPITAL MARKETS
MARKET PARTICIPANTS
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The Capital Markets Authority
The Nairobi Stock Exchange
Stock Brokerage Firms (CDA)
Private and Corporate Investors
Custodian Banks (CDA)
Issuers
Fund managers
Investment advisors
Unit Trusts
Registrars
Settlement Bank
THE KENYAN CAPITAL MARKET
THE CAPITAL MARKETS AUTHORITY
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The market regulator
Established under the Capital Markets Act in 1991
Makes the Capital Markets Regulations
Licenses market participants including CDSC
Approves the listing of the securities of Issuers on the
Exchange
Approves the CDS Rules and Procedures
Enforces the Rules and Regulations
ESTABLISHMENT OF CDSC

Central Depositories Act 2000
– Must be approved in writing by CMA
– A stock exchange must be a shareholder
– CDS Rules shall be approved by the regulator
– License is subject to annual renewal
GOVERNANCE STRUCTURE
 CAPITAL
– AUTHORISED AND FULLY PAID UP
– 100,000,000/= (US$ 1.4M) DIVIDED INTO
1,000,000 SHARES OF 100/= EACH
– ISSUED – ALL THE AUTHORISED CAPITAL
– FULLY PAID UP
GOVERNANCE STRUCTURE
SHAREHOLDING
NSE
- 20%
AKS NOMINEES
- 18%
CAPITAL MARKET CHALLENGE FUND – 50%
INVESTOR COMPENSATION FUND
- 7%
DSE
- 2.5%
USE
- 2.5%
GOVERNANCE STRUCTURE
BOARD OF DIRECTORS
11 DIRECTORS
ONE OF THEM TO BE CHAIRMAN
DIRECTORS APPOINTED BY MEMBERS AS FOLLOWS:
NSE -2
THE FUND -4
AKS - 1
DSE - 1
USE - 1
PUBLIC INTEREST – 2 – NOT STOCKBROKERS
DIRECTORS REMOVED BY APPOINTING PARTY
CDS CONSTITUENTS
•The CDS Organization
•The Capital Markets Authority
•The Nairobi Stock Exchange
•Stock Brokerage Firms (CDAs)
•Custodian Banks (CDAs)
•Retail and Institutional Investors
•Issuers and Registrars
•Settlement Bank
APPOINTMENT OF CENTRAL
DEPOSITORY AGENTS
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Members of the Stock Exchange
 Non-Bank subsidiary of a bank or financial
institutional
 Any institutional investor
 Any body corporate as prescribed by CMA
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Currently only stockbrokers and custodian
banks are CDAs
CENTRAL DEPOSITORY
AGENTS
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Stockbrokers are trading participant
 Custodian banks are settlement participants
only
 Stockbrokers can allocate trades to any
custodian account
 Custodians have the right of negative
affirmation by T+2
SETTLEMENT OF
TRANSACTIONS

T+4 Settlement Cycle
 T+1 Board
 Settlement Bank – Stanbic Bank, Kenya
 All CDAs have a settlement account with
the settlement Bank
 Settlement takes place at 4.00 p.m.
 Not Real DVP – Banks moves cash and
then CDSC moves securities
GUARANTEE FUND

Used to Settle Transactions When CDA fails
to fund settlement account
 Comprises:
– A guarantee fund levy – 0.01%
– Contribution of 1,500,000/= per CDA (US$ 22,000)
– Amount currently in the NSE Investor Compensation
Fund
– penalties
GUARANTEE FUND
No Settlement Caps – In the process of
introducing the Caps
 Trading limit will be determined based on
contribution to the Guarantee Fund
 Fund has been used, most notable for three
stockbrokers – 2 placed under statutory
management by CMA, 1 to restructure

PROGRESS TO DATE
• CDSC started operations on 10th November 2004
•Depository Statistics as at 30th September 2008
-Number of Accounts -
1,447,609
-Number of Shares immobilized -Value of shares in depository -
16.726 bn (31%)
34.5% of market cap
- Market capitalization = Kshs. 970,853,255,000 (US$
1.3bn)
MARKET PERFORMANCE 2008
NSE 20 Share Index
Plotted against
NSE All Share Index
6000.00
120.00
118.00
116.00
114.00
112.00
110.00
108.00
106.00
104.00
102.00
100.00
98.00
96.00
94.00
92.00
90.00
88.00
86.00
84.00
82.00
80.00
78.00
76.00
74.00
72.00
70.00
5000.00
3000.00
NSE All share Index
4000.00
2000.00
1000.00
0.00
02
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NSE 20 Share Index
`
NSE 20 Share Index
DATE
NSE All Share Index
MARKET PERFROMANCE
TURNOVER
25,000,000,000
20,000,000,000
15,000,000,000
TURNOVER
10,000,000,000
DEC
NOV
OCT
SEP
AUG
JUL
JUN
MAY
APR
MAR
FEB
-
JAN
5,000,000,000
GOING FORWARD…
Regional Integration – East African Markets
(Kenya, Uganda, Tanzania, Rwanda, Burundi)
 Value added services

– Handling of IPOs
– Registrar Services
– SMS Alerts
– E-Statements
THE END
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