Capital Markets

CDSC partners with Nigeria, Bermuda clearing firms


Africlear Global chairperson Rose Mambo. Nigeria’s Central Securities and Clearing System (CSCS) and Kenya’s Central Depository and Settlement Corporation Limited (CDSC) jointly signed a memorandum of understanding facilitated by AfriClear Global that will facilitate cross-border clearing and settlement of all sales and purchases by citizens of the two countries. FILE PHOTO | NATION MEDIA GROUP

The Central Depository and Settlement Corporation (CDSC) has partnered with two firms to form settlements firm Africlear Global.

The new company is expected to provide new income for the investors and reduce transaction costs for clearing houses through efficient after-trade processing.

Africlear is a joint venture with Central Securities Clearing System (CSCS) of Nigeria and the Altree Financial Group, a Bermuda-based financial company doubling as a broker for international clients investing in sub-Saharan Africa.

The joint venture which held its first board meeting in Nairobi last month will be chaired by CDSC chief executive Rose Mambo.

Ms Mambo said Africlear will enable central depositories in the region to club when buying technology, thus reduce operational costs.

“Africlear members will be able to realise significant cost savings via collective bargaining with industry participants and technology vendors,” she said.

Additional cost savings are expected to be realised by sharing maintenance costs for the systems.

The new company has received a boost from the African Development Bank (AfDB) which invested Sh36.8 million ($400,000) in seed capital through the Fund for Africa Private Sector Assistance. It will use the money to improve the infrastructure used for post-trading processes such as settlements after a sale is done.  

“The AfDB investment in Africlear Global supports the improvement of securities market infrastructure through promotion of industry-leading technologies designed to enhance the underlying efficiency and overall functioning of the African capital markets,” said Altree Financial Group chairman Anthony Fischli.

CSCS Nigeria chief executive Kyari Bukar said improved efficiency and standards will spur more investments across markets.

“This will enable local market practitioners to more effectively compete for domestic and international capital,” he said.

For the CDSC the investment in Africlear is expected to increase revenue streams by allowing the company to charge for corporate actions such as reconciling investors on share splits, dividend declaration and payments especially by international investors who mostly make the bulk of the traders on the Nairobi Securities Exchange.

At present foreign investors are charged fees for such alerts by their brokers and not the CDSC.