CHENGETEDZAI Depository Company Limited (CDC) will leverage its recent collaboration with Kenya’s Central Depository and Settlement Corporation Limited (CDSC) to achieve global standards.
The CDC is a limited liability company incorporated in terms of the laws of Zimbabwe and was formed to establish and operate a central securities depository for the southern African country securities industry.
CDC has partnered with the CDSC to unpack capital market operations and understand how it can reach global standards.
The CDSC is a Kenyan depository licensed by the country’s Capital Markets Authority to provide automated clearing, delivery and settlement facilities in respect of transactions carried out at Nairobi Securities Exchange.
CDC chief executive officer Prosper Mutorogodo told Standardbusiness that the company wanted to elevate itself to global standards in the coming years.
“We are grateful to the Kenyans for the knowledge we have gained, particularly regarding securities lending and borrowing (SLB),” Mutorogodo said.
“In time, I believe they will also learn from our experiences in certain areas.”
SLB is a practice where one party, the lender, temporarily transfers ownership of securities (like stocks or bonds) to another party, the borrower. In return, the borrower provides collateral, usually in the form of cash or other securities, and pays a fee to the lender.
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The CDC boss noted that learning from Kenya’s experience could expedite their progress, especially regarding the timeline for launching effective products.
“The initial concept for securities lending and borrowing in Kenya emerged in 2016, but it only went live in 2022. We are still working within our own timelines,” Mutorogodo said.
He said that learning from Kenyans would help them to quickly ‘master the game’ as they would be equipped with much knowledge.
“In terms of the time it takes for a good product to hit the market, I think you heard them saying that the first concept was realised on securities lending and borrowing in 2016, only for it to go live in 2022.
“So the time factor there, for us, we are still within,” Mutorogodo said
“So I wouldn›t say that perhaps it›s a challenge for us.
“But just to indicate that when you do such developments, it’s important to have everyone on board, particularly the government, the regulators and the market participants themselves.
“So that one is a key takeaway, to say involve everyone and move with everyone.”
Mutorogodo pointed out that the cross-pollination of ideas was crucial as global markets continued to evolve.
He emphasised the need for African markets to catch up, despite facing challenges such as currency fluctuations and inadequate policy frameworks that protected investors.
“So that cross-pollination is something that is continuing into the future. For us, we also go into the region to consult,” Mutorogodo said.
“They also come to our implementation here in Harare as they are doing certain things that we have done well.”
He said the outlook for the CDC was innovation.
“And for that, we will then be taking the entire capital markets to another level. What happened 10 years ago when we started digitalisation?
“Now, we are also bringing in another innovation,” Mutorogodo added.
He said consultation was paramount.
