Briefly describe the benefits of the Central Depository System (CDS) to the following stakeholders.
(ii) Capital Markets Authority and Nairobi Stock Exchange;
The benefits of central depository system (CDS) to the:
– There will be greater mobilization of savings in the economy
– It is a convenient way for FOI
– It reduces the cost of capital since transaction costs are significantly reduced.
(ii) Capital Market Authority and NSE
– Increased share turnover
– Increased stock market liquidity
– Improved transparency of stock market
– Better service delivery
– Reduced share transfer costs
– Faster and more efficient settlement of deals
– Investments become more liquid
– Reduced share certificate is required (dematerialisation)