A clearing and settlement agency in Kenya is a financial institution that facilitates the settlement of securities trades. It plays a critical role in the capital markets by providing a platform for the exchange of securities, including stocks, bonds, and other financial instruments.
In Kenya, there are several clearing agencies that operate within the country, each offering different services to market participants.
List of Clearing and settlement agencies in Kenya
Central Depository & Settlement Corporation (CDSC)
One of the main clearing agencies in Kenya is the Central Depository & Settlement Corporation (CDSC). It was established in 1996 and is the first and only central securities depository in the country. It provides electronic depository and settlement services for the equities and fixed-income markets.
The CDSC operates a central database of securities, enabling efficient and secure settlement of trades. It also provides services such as corporate action processing, securities lending and borrowing, and the issuance of new securities.
Nairobi Securities Exchange (NSE)
Another clearing agency in Kenya is the Nairobi Securities Exchange (NSE). The NSE is the principal stock exchange in the country and is responsible for the listing, trading, and clearing of securities.
It offers a range of services to market participants, including trade matching, clearing, and settlement. The NSE also provides a platform for the trading of debt securities, including government bonds and corporate bonds.
Financial Markets Conduct Authority
The Financial Markets Conduct Authority abbreviated as (FMCA), is a clearing and settlement agency in Kenya that is responsible for regulating and supervising the financial markets in the country.
Capital Markets Authority
The CMA (which stands for Capital Markets Authority), is also a clearing and settlement service in Kenya, responsible for the regulation and supervision of the capital markets.
Kenya Bankers Association
The Kenya Bankers Association (KBA) is a clearing agency that facilitates the clearing and settlement of interbank transactions, including checks, drafts, and electronic payment instruments. It also provides services such as the management of the Automated Clearing House (ACH), which is a platform for the electronic clearing and settlement of interbank transactions.
Kenya Revenue Authority
The Kenya Revenue Authority (KRA) is a government agency responsible for the collection of taxes and duties in the country. It operates the Electronic Fiscal Device (EFD) system; which is a platform for the electronic clearing and settlement of Value Added Tax (VAT) and other taxes.
Kenya Electronic Payment and Settlement System
Just like KBA, the Kenya Electronic Payment and Settlement System (KEPSS) is a clearing and settlement agency that also facilitates the clearing and settlement of interbank transactions, including checks, drafts, and electronic payment instruments.
It operates the Real Time Gross Settlement (RTGS) system, which is a platform for the electronic transfer of funds between banks in real time.
M-Pesa Mobile banking
The M-Pesa is a popular mobile money platform operated by Safaricom; a telecommunications company in Kenya. It enables users to send and receive money, pay bills, and access other financial services using their mobile phones. M-Pesa is a clearing agency in Kenya as it facilitates the clearing and settlement of transactions between users of the platform.
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