4.6 Transfer of shares under central depository system

What is Central Depository System?
CDS stands for the Central Depository System. This is a computer system operated by The Central
Depository and Settlement Corporation (CDSC) that facilitates holdings of shares in electronic accounts,
opened by shareholders and manages the process of transferring shares traded at the Stock Exchange.

Meaning of a CDS account
It is an electronic account that holds shares only.

A depository is like a bank, which holds securities (like shares, bonds, Government Securities among
others) for investors in electronic form. Besides holding securities, a depository also provides services
related to transactions in securities.
The main function of CDC is to operate and maintain the Central Depository System (CDS), an electronic
book-entry system used to record and maintain securities and to register the transfer of securities.
The system changes the ownership of securities without any physical movement or endorsement of
certificates and execution of transfer instruments.

The Central Depository & Settlement Corporation Limited (CDSC) is a limited liability Company
approved by the Capital Markets Authority to provide automated clearing, delivery and settlement facilities
in respect of transactions carried out at Nairobi Securities Exchange as well as holding of listed and nonlisted securities including other documents of title on behalf of investors.

Requirements to open a CDS account
 Two recently taken passport size photographs,
 Original National ID or passport.
 In the case of a company you need the original certificate of incorporation, and if you are an
organization registered in any other way you need the certificate of registration.
 Directors of a company will also need to provide their ID Cards and passport size photographs.
 To sign the form (CDS 1) before your Central Depository Agent (CDA).