CSD dematerialises $1,1bn transactions

Chengetedzai Depository Company has to date opened 1 915 accounts and processed dematerialisation transactions valued at $1,1 billion on the Central Securities Depository (CSD).

The CSD went live in September last year.

Chengetedzai’s Operations Manager Mr Bevin Ngara, who was speaking on a CBZ sponsored radio programme on Star FM on Thursday last week said the process had gone on smoothly.

“Close to 2 000 investors have opened accounts since the system went live last year. That’s 1 915 accounts to be precise. ”

Mr Ngara said 50 counters had been on-boarded onto the system while 15 129 dematerialised transactions valued at $1,1 billion had sailed through.

The value of Zimbabwe Stock Exchange deals processed and settled to date are 1 352.

“The deals work out to 3 572 transactions valued at $127,85 million.”

He said the process was being done in phases to avoid jamming the settlement chain as people undertook the dematerialise procedures and had been the case from other markets such as Ghana.

“Its not a capacity issue as we are largely unconstrained but rather Section 72 of the Securities Act requires a Board resolution to be passed before CSD on boarding, otherwise its illegal to on-board the companies.

“So company specific issues have delayed the passing of resolutions (some had board calendars in place before CSD calendar). ”

He said the functions of the CSD were electronic safekeeping of securities, clearing and settlement of trades (DVP) through electronic book entry, pledging of securities and securities lending and borrowing.

There are five custodians which can be approached when one wants to open a CSD account.

“One can go directly through a custodian or approach a stockbroker who indirectly engages the CSD through a sponsoring custodian,” said Mr Ngara.

He said the dematerialise process takes about 72 hours “unless there are problems with the paper work which may result in delays.”

When asked why there are delays in account opening and dematerialisation, Mr Ngara said the problems were experienced largely on the KYC for investors.

“There was in the beginning but there is compliance now. There were also legal issues where investors opened accounts with brokers with KYC which does not meet the international standards of the CSD.”

Mr Ngara also said there was need for strong risk ratings from global players such as Thomas Murray and AGC (AGC controls the flow of foreign investor money 70 percent of trades value on ZSE).

Going forward, Mr Ngara said the group is at advanced stages of launching a fixed income system.

Modules have already been installed while internal testing of the modules with specific attention to paper in the market was ongoing. — Wires.

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