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01.09.2004 Business & Finance

BoG to implement Central Securities Depository system

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Accra, Sept. 1, GNA- Bank of Ghana on Wednesday said it was on course to implement a new Central Securities Depository (CSD) for Government securities by the end of the year.

The new system would ensure that records of ownership of individual securities are maintained in electronic format centrally, as well as at the respective primary dealers, thus reducing the possibility of harm to investors due to poor record-keeping or dealer malfeasance.

"The system will eventually be extended to include other fixed-income securities as well as equity securities listed on the Ghana Stock Exchange," Mr Van Lare Dosoo, Deputy Governor, told market participants at a sensitisation workshop on the new system.

Mr Dosoo said when the CSD becomes operational shareholders of equities would no longer be given certificates as evidence of title and related transaction on securities.

The CSD would improve security and investor confidence and make it easier for investors to move securities from one dealer to another. "The new system will allow the investor to transfer that security to the dealer who is willing to pay the highest price for that security, an important step in developing a secondary market."

Mr Dosoo expressed the hope that the reforms being undertaken would broaden the market for securities and make it easier for investors to buy and sell securities at the best price.

Although the Bank of Ghana is leading the development of the system, it would hand over its management to a separate company. Mr Kofi Adu Labi, a Director of the Bank of Ghana, said the automation of the trading system would allow primary dealers to submit their bids electronically and help reduce the human contacts in the transaction.

Staff to manage the new system would complete their training this week.

Mr Labi said the CSD would give the impetus to big market players to invest in Ghana since they currently only channelled their resources to countries with such a system.

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