CBZ and Stanbic banks have won a tender to become settlement and clearing banks for the Central Securities Depository (CSD) which is expected to go live later this month, Chengetedza Depository Company Limited chief executive officer Campbell Musiiwa has said.
In an interview with Newsday, Musiiwa said the tender process was undertaken by a group of adjudicators that expected the banks to have good ICT systems as well as strong capital positions.
“CBZ and Stanbic have won the tender. Eight banks had expressed interest and only two banks have met all the criteria,” Musiiwa said.
“We put up the adjudicators’ committee to look at the strength of the bank, capital adequacy, good ICT systems and we were taking into account banks’ profitability because you don’t want a situation where people are trying to transact and the bank system is down.”
A Central Securities Depository (CSD) is a specialist financial organisation holding securities such as shares either in certificated or uncertificated (dematerialised) form so that ownership can be easily transferred through a book entry rather than the transfer of physical certificates.
This allows brokers and financial companies to hold their securities at one location where they could be available for clearing and settlement and this was usually done electronically.
He said the CSD would go live by end of this month after the final inspection has taken place.
“Part of the review has already started and currently there is pre-inspection and final inspection will follow,” he said.
The main advantages of the CSD system is that it ensures the bulk of securities transactions are processed in an electronic book entry form, thus expediting the settlement of equity transactions and ensuring compliance with international best practice.
Chengetedzai Depository Company Limited 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 Zimbabwe securities industry.
Chengetedzai won the right to establish the first Central Securities Depository (“CSD”) company in Zimbabwe on December 27, 2010 in a public tender from the Securities Commission of Zimbabwe.