Bourse shifts cash settlements to the central bank

Kenya’s capital market has shifted cash settlement of equities and corporate bonds traded on the bourse to the central bank’s payments system, to reduce risks and shorten transaction times, the market regulator said on Friday.

Before the shift on Thursday, cash settlement for securities was done by four commercial banks appointed by the market’s Central Depository and Settlement Corporation (CDSC).

Kenyan officials want to turn Nairobi into an international financial centre by modernising its capital markets and reducing the costs of doing business.

“This moves Kenya a step closer to attaining the status of a Regional and International Financial Centre as envisaged,” said Paul Muthaura, the acting CEO of Capital Markets Authority. Rose Mambo, the chief executive of CDSC, said the move to shift cash settlements to the central bank would help the market reach full delivery of securities against payments.

—Reuters