Namibia launches Central Securities Depository to boost stock market efficiency

Niël Terblanché

In a significant development for Namibia’s financial market, the Namibia Financial Institutions Supervisory Authority (Namfisa) has announced the approval of the Central Securities Depository (CSD).

According to Victoria Raimond, spokesperson of Namfisa, the approval of a CSD is set to revolutionize stock trading in the country.

She added that the establishment of the CSD aims to provide a centralized platform for the holding, safekeeping, and settlement of securities such as shares, bonds, and other financial instruments in electronic form, thereby enhancing market efficiency and liquidity.

Owned jointly by the Bank of Namibia and the Namibia Stock Exchange, the CSD marks a significant milestone in the evolution of Namibia’s capital market.

Raimond said that the approval, granted on 8 March 2024, is expected to catalyze a shift from paper-based securities to secure digital records, aligning Namibia’s market with global digital innovation trends in financial services.

“Namfisa believes that the centralized platform will not only streamline trading processes but also encourage broader market participation,” she said.

By fostering greater market liquidity, the initiative is anticipated to boost market confidence and attract further investments, both domestic and international.

Raimond said that the potential of the CSD lies in its ability to attract international investors keen on trading in domestic securities, thereby enriching the market’s diversity and depth.

According to Raimond, the introduction of the CSD is seen as a crucial step in replacing outdated paper-based systems with more secure, efficient, and accessible digital solutions.

“This digital transformation is expected to facilitate faster and more reliable transactions, reducing the risk of errors and fraud associated with physical documents,” she added.

She said that Namfisa awaits the full implementation of the CSD and added that the authority looks forward to the role this institution will play in the capital market industry, currently valued at N$251 billion.

According to Raimond, the CSD’s operationalization is anticipated to provide a substantial boost to the industry, enhancing Namibia’s attractiveness as an investment destination.

She added that the approval and forthcoming implementation of the Central Securities Depository represent a forward-thinking initiative by Namfisa and its partners.

“By modernizing the securities trading and settlement process, Namibia is setting a new standard for financial markets in the region, promising a future of greater efficiency, security, and inclusivity for investors at all levels,” she said.

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