By Jackson Okoth

Investors whose shares are still held at collapsed stockbroker Discount Securities Limited, can now heave a sigh of relief.

This follows an agreement which opens a window for transfer of shares to Kingdom Securities Limited, the investment-banking arm of Co-operative Bank.

It will also be possible for Discount Securities clients to trade at the Nairobi Stock Exchange (NSE), months after the collapsed broker was suspended from the trading floor.

The Capital Markets Authority (CMA) has granted a Central Depository Agency Services license to Co-operative Bank of Kenya Limited, allowing Kingdom Securities to provide custody for shares held by clients of Discount Securities Limited.

The purpose of this arrangement is to enable over 80,000 clients who held shares in CDS accounts through Discount Securities to access trading facilities, which they have not been able to since the suspension of the stockbroker from trading at the NSE.

It is also intended to save customers the inconvenience and costs of travelling to Discount Securities offices in Nairobi for purposes of transferring their shares. CMA placed Discount Securities Ltd, a licensed stockbroker, under statutory management on March 16.

Discount Securities has not rendered central depository services to investors who hold electronic accounts through it.

Central Depository Agent

The CMA earlier this year made arrangements to have such investors served by an active Central Depository Agent and invited bids for the provision of these services.

Co-operative Bank of Kenya Ltd successfully tendered to provide these services and won.

The Co-operative Bank of Kenya Limited’s wide branch network is expected to assist clients access their shares. A public notice advising Discount Securities clients of this arrangement has been issued.

Co-operative Bank will render central depository agency services including opening, registration and maintenance of CDS accounts.

It will also be processing and facilitating the transfer of securities, receiving claims forms from clients and forwarding them for processing.

After the mass transfers have been effected, investors who choose to remain with Co-operative Bank may do so and continue to trade as its clients. However, those who would like to transfer their CDS accounts from Co-operative Bank to other central depository agents may do so by following the normal CDS accounts transfer process.

The transfer of accounts from Discount Securities to Kingdom Securities appear to be the final epitaph on the tombstone of this brokerage firm.