- The enactment of the Securities Act Chapter 24:25 provides for the setting up of Central Securities Depositories (CSDs) for the settlement of trades on listed exchanges. (Section 69 of Securities Act Chapter 24:25)
- Chengetedzai Depository Company Limited (CDCL) is the entity appointed to establish and manage the implementation and running of the CSD in Zimbabwe. This entity is locally owned with government interests represented by shareholding through the ZSE and the National Social Security Association (NSSA).
- Following the granting of the necessary regulatory approvals, CDCL has officially commenced operations of the CSD. Paper based securities will now be “dematerialised” into electronic form prior to them trading/settling under the CSD.
- This process will follow a phased approach with counters moving in batches.
- Process commenced on the 8 th of September 2014, with three counters: CBZ, COTTCO and FBC Holding trading/settling exclusively through the CSD.
- Next batch of counters was migrated to the CSD on the 6th of October 2014, with the next batch to follow on the 3rd of November 2014. Final batch to go live beginning of December 2014. (detailed lists in later slides)
- ALL clients, retail and institutional, MUST have a custody account for them to be able to transact in their securities under the CSD platform. However, please note that clients MUST still place orders to trade via their stockbrokers as has been the case prior to the adoption of the CSD.
- Retail clients will have the option to open CSD accounts via a ‘Broker controlled account’. This facility allows a broker to open a single bulk account with a selected custodian, under which the broker can administer multiple sub-accounts for smaller retail clients. The client MUST sign a mandate form with his/her preferred broker.
- Ultimately CDCL intends to reduce the current settlement cycle under CSD from T+5 days (however effectively still T+7 days as the CSD system excludes weekends) to T+3 days.