A Central Depository Licence is issued by the Capital Markets Authority (CMA) to entities that hold and transfer securities in electronic (dematerialised) form on behalf of investors — a role currently performed in Kenya by the Central Depository and Settlement Corporation (CDSC). This licence is required under Section 23(2) of the Capital Markets Act.
CMA Fee Schedule for Central Depositories
| Charge | Amount (KES) |
|---|---|
| Application Fee | 100,000 |
| Licensing Fee | 200,000 |
| Annual Regulatory Fee | 200,000 (fixed) |
Unlike securities exchanges, central depositories pay a fixed annual regulatory fee rather than a percentage of earnings, reflecting their role as market infrastructure rather than a profit-maximising trading venue.
What a Central Depository Does
- Maintains electronic records of securities ownership
- Facilitates the transfer of securities between buyers and sellers upon settlement
- Eliminates the need for physical share certificates
- Works alongside settlement banks and the exchange to complete trades
Core Requirements
- Demonstrated technical capacity for secure electronic record-keeping
- Business continuity and disaster recovery systems
- Sufficient core capital as prescribed by CMA
- Fit-and-proper assessment of directors and key staff
- Interoperability with the licensed securities exchange(s)
Application Process
- Submit application and technical infrastructure documentation to CMA
- Pay the KES 100,000 application fee
- CMA reviews systems security, governance, and capital adequacy
- Pay the KES 200,000 licensing fee upon approval
- Remit the fixed KES 200,000 annual regulatory fee every year thereafter
At KES 300,000 to enter and KES 200,000 annually thereafter, the Central Depository Licence fee structure is comparable to that of a securities exchange, underscoring how both are treated as critical market infrastructure under Kenya’s 2025 licensing regime.
