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Benefits of Ghana's Central Securities Depository (CSD) System
Overview
The establishment of Ghana’s Central Securities Depository (CSD) is a key initiative within Ghana’s Financial Sector Strategic Plan (FINSSP) to attract investments and strengthen the Ghanaian economy.
The CSD system offers multiple benefits, including enhanced security, operational efficiency, and improved liquidity in the Ghanaian securities market.
01.
Enhanced Security &
Risk Reduction
One of the core advantages of the CSD system is the elimination of risks associated with paper-based securities, such as loss, mutilation, and theft. By digitizing securities, investors no longer face these physical risks, leading to a safer environment for trading and holding investments.
02.
Efficient Delivery vs. Payment (DVP) Mechanism
The CSD enables a streamlined Delivery vs. Payment (DVP) process, ensuring simultaneous settlement of securities and funds. This automation significantly reduces human errors and delays inherent in manual, paper-based processing, enhancing the overall efficiency of Ghana's securities clearing and settlement processes.
03.
Increased Market Liquidity
One of the core advantages of the CSD system is the elimination of risks associated with paper-based securities, such as loss, mutilation, and theft. By digitizing securities, investors no longer face these physical risks, leading to a safer environment for trading and holding investments.
04.
Easier Collateral Management for Loans
The CSD enables a streamlined Delivery vs. Payment (DVP) process, ensuring simultaneous settlement of securities and funds. This automation significantly reduces human errors and delays inherent in manual, paper-based processing, enhancing the overall efficiency of Ghana's securities clearing and settlement processes.
05.
Transparent Investment
Tracking & Statements
The CSD offers transparency through regular quarterly statements, allowing investors to track the total number of shares or the total face value of debt securities they own. Investors can also request statements at any time for a nominal fee, making it simple to stay informed on their investment status.
06.
Confidentiality &
Data
Integrity
Strict confidentiality agreements between the CSD and its participants protect investors' information. The CSD maintains all records electronically, which reduces the risk of data theft or loss and ensures that updates are conducted in real-time with each transaction.
Primary Objective of the CSD: Security & Efficiency
The CSD’s primary goal is to enhance security while improving efficiency in the Ghanaian securities market. Through digitization, the CSD strengthens the investment environment by making it safer, more efficient, and more accessible, aligning with Ghana’s vision for a robust and transparent financial sector.
