The Central Securities Depository was established in November 2004 as part of the recommendation of the Bond Development Committee, an aspect Of the Financial Sector Strategic Plan, to improve Ghana’s attractiveness as an investment destination.
Prior to the establishment of the Central Securities Depository, bids for Government securities were submitted to the Central Bank in hard copies. Manual processing led to delays in clearing and settlement. In addition, there were mutilation, misplacement and loss of certificates. Replacing these certificates introduced avoidable costs of printing. There were also instances of forgery of certificates.
The CSD has facilitated the electronic issue and redemption of Government Securities in electronic form. Interest and maturity processing has been made efficient and investors are assured of proceeds on their investments in a cost effective and timely manner.
By helping to reduce settlement risk the CSD ensures that investors have the confidence on the market. Currently the CSD has become the repository of approximately 383,000 investors comprising local and foreign individuals and corporate investors.
But we cannot sit idly and bask in our achievements. We have to move to the next stage. The next challenge is to synchronize securities settlement in what is referred to as Delivery versus Payment (or DvP). This requires that the settlement systems (the Real Time Gross Settlement Systems and the Depository) are linked for a straight through processing without human intervention.
Recognising that the Ghana market is too small for the co-existence of two distinct Depositories, we need to start a process of merging the operations of Bank of Ghana’s depository with that of the GSE for even more efficient cost of delivery.
