Central Bank allows treasury bill trading for all investors [Business Daily (Kenya)]
(Business Daily (Kenya) Via Acquire Media NewsEdge) The opportunity to buy and sell treasury bills in the secondary market, previously open only to commercial banks, has been extended to all investors.
Investors who hold electronic Central Depository and Settlement (CDS) accounts can now buy and sell over the counter (OTC), which is a market operated by the banks and brokerage houses to facilitate exchange of the instruments without going through the Nairobi Securities Exchange.
Securities such as T-bills – which are short-term borrowing instruments – and shares that are not listed on the NSE are sometimes traded with facilitation of banks and brokers through the OTC.
Investors are expected to use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) which facilities secure message transmission through use of a unique identification code used by financial and non-financial institutions. Commercial banks send messages on their transactions that then get automatically registered on the Central Bank of Kenya ICT systems.
CBK assistant director for financial markets Andrew Marete said in a statement that investors without direct access to SWIFT connectivity would be required to get into arrangements with commercial banks in order to use the banks' networks to transmit instructions for trading in the T-bills.
The CBK also provided guidelines on how to participate in the OTC platform. The guidelines also show the format of the SWIFT messages.
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