STOCK exchange market in Kampala is to end issuing of paper certificates to investors in the capital market late this year by introducing electronic accounts.
The electronic accounts will be held under what is termed; the Central Depositary System (CDS), a computerised system that facilitates faster and easier processing of transactions for shares and bonds.
CDS attracts both local and international market participants. CDS account holders have up-date-information on their holdings and the convenience of electronic securities transfers to facilitate trade settlement.
"Consideration has been given to linking payment systems in the East African Community to the CDS system to form an integrated payment, clearing and settlement frame, automated trading system," Katto said.
While presenting a paper titled: "Performance of Capital Market in East Africa" Katto said the markets in East Africa should be linked to more developed markets in Africa and beyond.
The Central Depository System (CDS) Act was passed by Parliament in July 2000 in Kenya and since then, the liquidity in its market capital, according to Katto, has more than doubled because its flexible to the investor as they do not have to wait to be issued with paper certificates that may take weeks.
Holders of CDS enjoy the benefits of reduced cost and risks associated with the environment where holding and moving physical scrip has been the norm.
Observers say the success of regional integration will depend on finding solutions to key country- level problems. This implies that consistent and assured political backing of the EAC authorities will be crucial for capital market integration to materialise.
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