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Thursday, 28 February 2019

Shares agency to freeze idle NSE accounts

Rose Mambo

By PATRICK ALUSHULA
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Nairobi Securities Exchange (NSE) share accounts that have been inactive for the last two years will be frozen by the end of Thursday in a bid to protect investors against fraud.
The custodian of the accounts, Central Depository and Settlement Corporation Ltd (CDSC), announced Wednesday the accounts would be declared dormant and therefore unable to transact unless re­activated.
“Pursuant to the dormancy rules, CDSC accounts (individual or corporate, local or foreign) with no activity for a continuous period of 24 months as at February 28, 2019, will be declared dormant on March 1 2019,” CDSC announced on Wednesday.
“The declaration of dormancy is intended to safeguard investors’ holdings in CDSC accounts.”
This means no transactions will be effected on any account declared dormant unless the owners apply for reactivation in line with the CDSC Accounts Dormancy Rules and Procedures effected in May last year.
The agency had granted inactive investors a grace period of nine months from June last year.
Upon declaration of dormancy on an account, the CDSC must send a notification to the account holder informing them of the declaration. Disabling inactive accounts will ensure that investors’ money is not vulnerable to fraudsters.
Last year, a total of 16,058 CDS accounts were opened, a 3.38 per cent increase compared to 15,533 in 2017.
Capital Markets Authority data covering up to last December show there were 1.23 million investors in equities, with 95.4 per cent be­ing local individual investors. Bond market had 4,409 investors.
One can apply for reactivation of the account through online portal or mobile application. In the case of activation using central depository agent (CDA), the CDA will have to produced receipt and verification of the reactivation instructions and indemnity from the account owner.

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