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Finance

CDSC Account in Kenya: What It Is and How to Open One

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Easy Access Staff

What is a CDSC Account?

CDSC stands for Central Depository & Settlement Corporation. It’s the government-authorized institution that holds all shares traded on the Nairobi Securities Exchange (NSE) electronically.

Think of it as: A digital vault where your shares are safely stored.

Key point: You cannot own shares on the NSE without a CDSC account. It’s mandatory.

Why CDSC Was Created

The Old System (Before 2004)

Physical share certificates:

  • Companies issued paper certificates
  • You stored them at home or bank
  • Easy to lose, damage, or forge
  • Transfers took weeks
  • High risk of fraud

Problems:

  • Lost certificates = complicated replacement process
  • Theft and forgery common
  • Slow settlement (took 14-21 days)
  • Expensive to manage

The New System (2004-Present)

Electronic system through CDSC:

  • All shares held digitally in your CDSC account
  • No physical certificates
  • Instant verification of ownership
  • Transfers settled in 3 days (T+3)
  • Dividends paid directly to your bank account
  • Secure, transparent

Result: Safer, faster, more efficient market

What CDSC Does

1. Holds Your Shares Electronically

Your CDSC account shows:

  • Which companies you own shares in
  • How many shares of each
  • When you bought them
  • Your total portfolio

Like: A bank account, but instead of money, it holds shares

2. Settles Trades

When you buy or sell shares:

  • Day 1 (T+0): Trade executed
  • Day 4 (T+3): CDSC transfers shares from seller to buyer

Settlement = Official ownership transfer

3. Processes Corporate Actions

CDSC handles:

  • Dividends: Ensures dividends reach your bank account
  • Bonus shares: Adds free shares to your account
  • Rights issues: Notifies you when you can buy more shares
  • Stock splits: Updates your holdings automatically

4. Maintains Ownership Records

Official record keeper:

  • Companies use CDSC records for shareholder lists
  • AGM invitations sent based on CDSC records
  • Dividend payments based on CDSC records

Your CDSC account = Proof you own the shares

Who Needs a CDSC Account?

Required For:

  • NSE investors: Anyone buying shares on Nairobi Securities Exchange
  • Corporate bond holders: Bonds traded on NSE
  • Rights issues participants: Existing shareholders exercising rights
  • IPO participants: Buying shares in Initial Public Offerings

Not Needed For:

  • Bank savings
  • Money market funds
  • Treasury bills/bonds (bought through CBK)
  • SACCOs
  • Real estate
  • Business investments

Bottom line: Only for securities traded on NSE.

Types of CDSC Accounts

Individual Account

For: One person investing for themselves

Ownership: You alone control the account

Best for: Most retail investors

Joint Account

For: Two or more people (e.g., spouses, business partners)

Ownership: All parties must agree to transactions

Best for: Couples investing together, family investments

Minor Account

For: Child under 18 years

Ownership: Parent/guardian controls until child turns 18

Best for: Parents investing for children’s future

Corporate Account

For: Companies, institutions, investment clubs

Ownership: Company/organization

Requirements: Additional documents (certificate of incorporation, board resolutions)

How to Open a CDSC Account

Option 1: Through a Stockbroker (Easiest)

Most common method—broker handles everything.

Step 1: Choose a licensed stockbroker

  • Verify at cma.or.ke
  • Popular options: Genghis, Faida, AIB-AXYS, SIB, Dyer & Blair

Step 2: Request to open trading account

  • Broker will include CDSC account opening in their process

Step 3: Provide documents (see list below)

Step 4: Fill forms

  • Broker provides CDSC Account Opening Form
  • Fill your details carefully

Step 5: Submit to broker

  • Broker forwards to CDSC on your behalf

Step 6: Wait for approval

  • Usually 3-7 business days
  • Broker notifies you when ready

Step 7: Receive CDS number

  • Unique account number (8-10 digits)
  • Via SMS or email
  • Keep it safe!

Advantages:

  • One-stop process
  • Broker assists you
  • Less hassle

Disadvantages:

  • Slightly slower (broker middleman)
  • Tied to that broker initially

Option 2: Directly with CDSC (Faster)

You open yourself, then use with any broker.

Step 1: Visit CDSC office

  • Location: IKM Place, Tower A, 5th Ngong Avenue, Nairobi
  • Time: Monday-Friday, 8:30am-5:00pm
  • Or authorized CDSC agents (banks, some brokers)

Step 2: Request CDSC Account Opening Form

  • Available at office or download from cdsckenya.com

Step 3: Fill form

  • Personal details
  • Contact information
  • Bank account (for dividends)
  • Signature

Step 4: Attach required documents (see below)

Step 5: Submit at CDSC office

  • Staff will verify documents
  • May ask clarifying questions

Step 6: Pay any applicable fees (usually none or minimal)

Step 7: Receive CDS number

  • Usually same day or within 1-2 days
  • Via SMS/email

Step 8: Use CDS number with any broker you choose

Advantages:

  • Faster (direct process)
  • Flexibility to use any broker
  • Control over your account from start

Disadvantages:

  • Must visit office in person (or authorized agent)
  • Separate process from broker account

Option 3: Through Bank (Limited)

Some banks offer CDSC account opening services.

Example: If your bank is a CDSC agent

Process: Similar to Option 2, but at bank branch

Check: Ask your bank if they offer this service

Documents Required

For Individual Account

  1. National ID

    • Original (for verification)
    • 2 photocopies (clear, both sides)

  2. KRA PIN Certificate

    • Download from itax.kra.go.ke
    • Print

  3. Passport-size photos

    • 2 recent photos

  4. Bank account details

    • Bank name
    • Branch
    • Account number
    • Account name (must match your ID)
    • Purpose: For receiving dividends

  5. Proof of residence (sometimes required)

    • Utility bill (KPLC, water, internet)
    • Or rental agreement
    • Or bank statement
    • Dated within last 3 months

  6. Completed CDSC Account Opening Form

For Joint Account

All the above for EACH account holder, plus:

  • Signed agreement between parties
  • Specify: “Either to sign” or “Both to sign”

For Minor Account

All individual documents for parent/guardian, plus:

  • Child’s birth certificate (copy)
  • Child’s photo

For Corporate Account

  • Certificate of incorporation
  • CR12 (current directors)
  • Board resolution authorizing account opening
  • Directors’ IDs and KRA PINs
  • Company KRA PIN
  • Authorized signatories

Costs

Opening Fee

Usually FREE or very minimal (KES 50-100)

Annual Custody Fee

KES 50-100 per year

Purpose: Maintain your account, keep records

Payment: Usually deducted automatically when you trade or from dividends

Other Fees

Per transaction (when buying/selling shares):

  • CDSC fee: ~KES 5 per trade
  • Included in your broker’s total cost

Bottom line: CDSC costs are negligible—don’t let fees stop you from opening an account.

Your CDS Account Number

What It Looks Like

Format: Usually 8-10 digits

Example: 1234567 or 1234567890

Unique: No two accounts have same number

Where You’ll Use It

  • Broker account opening: Link your CDSC to broker
  • Buying/selling shares: Broker needs it for every transaction
  • AGMs: Register using your CDS number
  • Dividends: Cross-reference with bank account
  • CDSC portal: Log in to view holdings

Keep It Safe

  • Save in your phone contacts (label “My CDS Number”)
  • Write in a secure note
  • Share only with licensed brokers
  • Never share on social media or unsecure channels

Using Your CDSC Account

If you opened CDSC directly:

  • When opening broker account, provide your CDS number
  • Broker links their system to your CDSC account
  • Now you can trade

If broker opened it for you:

  • Already linked—nothing extra needed

View Your Holdings

CDSC Portal:

  1. Visit cdsckenya.com
  2. Register/login (use your CDS number)
  3. View your portfolio:
    • Stocks you own
    • Number of shares
    • Companies
    • Recent transactions

Broker Platform:

  • Usually shows same information
  • More user-friendly interface
  • Real-time values

Both are official—CDSC is the ultimate record.

Receive Dividends

Process:

  1. Company declares dividend
  2. CDSC verifies shareholders on record date
  3. Company sends dividend payment to CDSC
  4. CDSC transfers to your registered bank account
  5. Usually within 30-60 days after AGM

Important: Keep bank account details updated!

Attend AGMs

As a shareholder, you can attend company AGMs:

  • CDSC records used to send invitations
  • Bring your ID and CDS number
  • Vote on company matters
  • Receive company updates

Even small shareholders welcome—you’re an owner!

Updating Your CDSC Account

Change of Bank Account

Why: Dividends must reach you

How:

  1. Fill “Change of Bank Account Details” form
  2. Attach new bank statement or verification letter
  3. Submit to CDSC or through broker
  4. Updated within 5-7 days

Tip: Do this BEFORE record date for dividends

Change of Phone/Email

Why: Receive SMS/email notifications

How:

  • Through CDSC portal (if registered)
  • Or visit CDSC office with ID
  • Or through your broker

Change of Address

How:

  • CDSC change of particulars form
  • Submit with proof of new address

Lost CDS Number

Don’t panic:

  1. Check old emails/SMS
  2. Contact your broker (they have it)
  3. Or visit CDSC with ID (they’ll retrieve it)

Your account is safe—number is just for access.

Security & Safety

CDSC is Safe

Government-backed institution:

  • Regulated by Capital Markets Authority
  • Cannot collapse like some companies
  • Your shares are secure

Electronic system:

  • No risk of lost/stolen certificates
  • Encrypted and secure
  • Regular audits

Your Responsibility

Protect your information:

  • Don’t share CDS number publicly
  • Use secure passwords for CDSC portal
  • Verify anyone claiming to represent CDSC
  • Report suspicious activity immediately

Beware of scams:

  • CDSC never asks for money via SMS/email
  • Don’t click suspicious links
  • Verify phone calls (call official number: 020-2221000)

Verify Brokers

Before linking your CDSC to a broker:

  • Check cma.or.ke for licensed brokers
  • Avoid unlicensed individuals promising quick returns
  • Report scams to CMA: complaints@cma.or.ke

Common Questions

Can I have multiple CDSC accounts?

No—one person, one CDSC account.

Why: To prevent fraud and maintain clear ownership records

If you already have one: Use same account for all NSE investments

Can I use multiple brokers with one CDSC account?

Yes!

How: Give your CDS number to any licensed broker. They link their system to your account.

Advantage: Shop around for best broker fees, service, platform

What happens if I don’t trade for years?

Account remains active—no closure for inactivity.

Your shares are safe.

Dividends: Still paid to your bank account (if bank account still exists).

Tip: Log in annually to verify holdings, update details if needed.

Can I transfer shares to someone else?

Yes—called “off-market transfer”.

Common cases:

  • Gift shares to family member
  • Estate transfers (inheritance)
  • Private sales

Process:

  • Complete share transfer form
  • Both parties sign
  • Submit to CDSC (fee applies)
  • Shares move from your CDSC to recipient’s CDSC

What if a company is delisted?

Your shares remain in your CDSC account.

Options:

  • Company may buy back shares
  • Shares may trade elsewhere (e.g., over-the-counter)
  • Company may be acquired
  • In worst case (bankruptcy), shares may lose value

CDSC still keeps record of your ownership.

Do I need to renew my CDSC account?

No renewal needed—it’s a lifetime account.

Just maintain it:

  • Pay annual custody fee (minimal, often auto-deducted)
  • Keep contact details current

CDSC vs Other Systems

CDSC vs Broker Account

CDSC: Holds your actual shares (ownership record)

Broker account: Trading platform, executes orders, shows portfolio

Relationship: Broker accesses your CDSC account on your behalf.

Analogy:

  • CDSC = Vault where gold is stored
  • Broker = Key to access vault

You need both to buy and hold shares.

CDSC vs M-Akiba/M-Pesa

CDSC: For NSE-listed shares and corporate bonds

M-Akiba: Government retail bond platform (separate system)

M-Pesa: Mobile money (not for securities)

No overlap—different systems for different purposes.

Tips for New CDSC Account Holders

  1. Open early: Even before you have money to invest—account is ready when you need it
  2. Register on portal: Set up online access to monitor holdings
  3. Save CDS number: Multiple secure locations
  4. Keep documents: Save account opening forms, confirmation messages
  5. Update bank details: Before record dates for dividends
  6. Link to broker: Choose licensed broker, link accounts
  7. Check holdings regularly: At least annually, verify everything is correct
  8. Report issues immediately: Contact CDSC or broker if something looks wrong
  9. Attend one AGM: Great learning experience as a shareholder
  10. Educate family: Ensure family members know about your investments (for inheritance)

Checklist: Opening Your CDSC Account

✅ Decided method: Through broker, direct with CDSC, or via bank ✅ Gathered documents:

  • National ID (original + 2 copies)
  • KRA PIN certificate (printed)
  • 2 passport photos
  • Bank account details
  • Proof of residence ✅ Downloaded/obtained CDSC Account Opening Form ✅ Filled form carefully and accurately ✅ Verified chosen broker (if using broker method) at cma.or.ke ✅ Submitted application ✅ Waiting for CDS number (or received it) ✅ Saved CDS number securely ✅ Registered on CDSC portal (cdsckenya.com) ✅ Linked CDSC to broker account ✅ Ready to start investing!

Next Steps

  1. If you haven’t opened CDSC account yet: Do it this week (method of your choice)
  2. If you have CDS number: Link to a licensed broker
  3. Fund your broker account: Prepare to buy your first shares
  4. Research stocks: While waiting for accounts to be ready
  5. Read next: “How to Buy Shares on the NSE” guide

Your CDSC account is your gateway to stock market investing in Kenya. It’s free or very cheap, takes less than a week, and opens the door to building wealth through owning real businesses. Don’t let it intimidate you—follow these steps, and you’ll be a shareholder soon!