The idea of establishing a Depository in Ghana originated from Ghana's Financial Sector Strategic Plan (FINSSP) developed in the early 2000's to reform the financial system and to attract investors into the Ghanaian economy. As a result, a National Bond Market Committee was established. The National Bond Market Committee was, among other objectives, mandated to identity the constraints in the development of corporate bond market of Ghana and recommend policies to facilitate smooth development of bond market. Moreover, the committee was tasked to monitor the performance of the government bond market to serve as a benchmark for the development of the corporate bond market in Ghana.
Arising out of its work, the Committee in 2002 recommended that, the Government of Ghana should support the Bank of Ghana and the Ghana Stock Exchange to set up an automated securities depository and clearing and settlement system in Ghana. In other words, a Central Securities Depository with the core objective of promoting investment activities in the country's financial market through the elimination of risks such as forfeiture, theft, mutilation etc that are associated with the issuance of paper based securities.
Following the recommendation of the National Bond Market Committee, the Bank of Ghana in November, 2004 established the first Depository in the country alongside an Electronic Auction system to handle the issue, custody, dealing and redemption of government securities. This led to the establishment of an implementation committee to supervise the smooth implementation of a Central Securities Depository (CSD) to cater for all securities in Ghana. Membership was drawn from the Ministry of Finance, Bank of Ghana and Ghana Stock Exchange.
The Ghana Stock Exchange in order to satisfy the prerequisite for the implementation of an Automated Trading System set up a Depository, the GSE Securities Depository Company Ltd. (GSD) as a wholly owned subsidiary. The GSD was incorporated to facilitate the dematerialization of securities, the admittance of securities into the securities depository system and provide facilities for effective electronic deliveries of book-entry securities. The GSD was granted a licence by the Securities & Exchange Commission to operate a Securities Depository on November 5, 2008 and started operations on November 14, 2008. The implementation of the System by the GSE Depository Company ushered in a new era of fast and efficient delivery and settlement system for equities and corporate bonds on the market.
As at the time of the merger of the two Depositories, GSD had 76% of the total issued shares of listed Companies, opened 76,344 accounts and had successfully set up a registrar unit that managed the registers of CAL Bank Ltd, Tullow Oil Plc and afb Limited. Recognising the small nature of the country's market a process was initiated in 2012 to merge the two Depositories operating in the country with support from the Ministry of Finance. Thus, the merger was necessitated to establish a single Depository to serve as a one-stop-shop for dealings involving debt and equity instruments in the country.