The Central Security Depository CSD system in Zimbabwe yesterday saw its historic automation as the system was officially announced to have fully automated, integrating the Zimbabwe stock exchange and Chengetedzai during a press conference.
This landmark move will see automation of clearing and processing of trades that have gone through the stock exchange.
By Toneo Tonderai Rutsito
“A CSD is a system that caters for the safe storage of securities and allows the same securities to be transferred from one system to the other electronically, instead of taking care of equities manually in a paper based share certificate system where share certificates would take 7 days, this system is now automated explained CEO of Chengetedzai Depository Company”, Mr Campbell Musiwa
Giving an in depth understanding of the system, Mr Campbell Musiwa, said the products on the exchange that CSD also looks into include treasury bills, bonds, and commercial bonds which can be traded on a depository and the upcoming talk of the warehouse receipts in Zimbabwe ,for the commodity exchange will also be securitised and be traded on the platform that will be catered for on the platform.
In other markets the issue of the CSD, where issues like KYC for genuinety of certificates, title deeds are seated on the CSD, but the key advantage is the issue of efficiency in a world class standard seeing the settlement time frames drastically reduced.
“Zimbabwe is operating on the T+7 settlement time and its the only country in the world operating on that platform while those countries which are lagging are operating on T+3 but the European countries are talking of T+2. While we hope by June next year we would have moved over.
American pension funds are not allowed to invest in a country where there are no CSD, while in Zimbabwe 60-70 % are already coming from foreigners, we are optimistic by this move we will increase revenue, Said Mr Madziva.
Tafadzwa Chinhamo the chief executive of Central security services commission, said yesterday was a historic day that we shall look back to and celebrate the milestone as Zimbabwe cautiously builds the infrastructure that we are so much lagging in a manual paper based system which has really scared off investors.
The ATS (Automated Trade System ) has seen the integration, Chengetedzai as the back end and the Zimbabwe stock exchange as the front end, which has seen the two systems working together where the traders actually trade but the automation via over WAN for end to end seamless automation.
The CEO of the Zimbabwe Stock Exchange, MrAlban Chirume also gave a comparable analysis with Kenya, one of African countries that has already successfully implemented the system although there was serious scepticism when it was initially launched where it took 10 years to implement in Kenya
The Chairman of Chengetedzai Mr Z Ndlovu who has worked closely in the implementation of the CSD in Kenya was key in transferring the experience and value to the Zimbabwe market.
He also spoke in depth of the digital security system implemented behind the system as worries against intruders are now rife. He spoke of the digital security system implemented to make sure that there is intrusion prevention, detection and correction to push away attacks from the system.
He also explained that the system is robust from hacking attempts like database manipulation and common threats against data querying like SQL injection as the access is only via a Virtual Private Network, VPN and direct access to the server is not possible as they use gateways as the last reachable communication interface for any user.
The world has advanced in electronic trading and Zimbabweis commended as they move in to catch up with the world to automate its system and also a requisite by the regional block, SADC.