BoG, Ghana Stock Exchange depositories merge
The Central Securities Depository (CSD) Ghana and the GSE Securities Depository Company Limited (GSD) have merged into a single entity.
An agreement to that effect was signed between officials of the Bank of Ghana and the Ghana Stock Exchange.
The Governor of the Bank of Ghana, Dr Kofi Wampah, signed on behalf of CSD, while the Chairman of the GSD board, Mr Franklin Asafo-Adei, signed on behalf of the entity.
The CSD is wholly owned by the Bank of Ghana to manage the issue and redemption, as well as maintain the records of ownership of securities issued by the Government of Ghana, Bank of Ghana and the Ghana COCOBOD.
In 2008, the GSE also established the GSE Securities Depository Company Limited (GSD) as a subsidiary to provide custody for securities listed on the GSE and also to provide for the dematerialisation of share certificates.
Under the terms of the agreement, the CSD Ghana Ltd shall be the surviving entity with effect from January 1, 2014.
The Bank of Ghana will own 82 per cent of the new company and transfer 18 per cent to the GSE.
The GSE will be allowed to increase its shareholding up to 30 per cent within one year at a price existing at the time of the merger.
The Head of the CSD, Mr Stephen Tetteh, will maintain his position as Chief Executive Officer, while the Executive Director of the GSD will assume the position of Deputy Chief Executive.
All the staff of the GSD will be absorbed into the new company.
The merged entity will handle both unlisted securities and those listed on the GSE, as well as the Government of Ghana and the Bank of Ghana instruments, corporate bonds and money market instruments.
It will also operate the registrar services under the licence granted by the Securities and Exchange Commission.
Dr Wampah said the merger was necessary because the two depositories were a duplication of cost and efforts, and pledged Bank of Ghana’s support to mitigate transitional problems.
Mr Asafo-Adei said the merger would provide a common depository platform for the two institutions and harmonisation of trading, as well as clearing and settlement practices.
“This will generate benefits and thus create significant additional value for all market participants,” he said.
The merger will make for a more efficient trading of fixed income and equity securities and reduce operational cost for the merged depository and lower transaction cost for market participants.
Mr Asafo-Adei said 76 per cent share certificates had been dematerialised and 75,978 securities accounts had been opened, enhancing trading volumes and values. - GNA