Opening Your CDS Account: Choosing a CDP

Every Treasury bill and bond you buy is recorded in your own account in the Bank of Tanzania's Central Depository System (CDS). There are no paper certificates. You open that account through a Central Depository Participant (CDP), and the same CDP then submits your bids.

What is a CDP?

Under the Bank of Tanzania's CDS rules, a CDP is either a bank licensed under the Banking and Financial Institutions Act, or a broker-dealer licensed by the Capital Markets and Securities Authority (CMSA).

The Bank of Tanzania's 2022 bond guidelines list 51 registered CDPs, including:

• Banks: CRDB Bank, National Microfinance Bank (NMB), National Bank of Commerce (NBC), Azania Bank, Stanbic, Standard Chartered, Absa, Exim, KCB, Equity, DTB, I&M, Tanzania Postal Bank, Mwalimu Commercial Bank, Mkombozi, Maendeleo, Amana Bank, Akiba, People's Bank of Zanzibar and others.

• Brokers: Core Securities, Orbit Securities, Rasilimali, Solomon Stockbrokers, Tanzania Securities, Vertex Securities, Zan Securities, Optima, Smart Stock Brokers and others.

The list can change. Ask the bank or broker you prefer whether it is a CDP for Government securities.

How to choose your CDP

Ask these questions before you sign:

• Fees: Do you charge to open the account, to submit a bid, or a yearly fee? Ask for the tariff in writing.

• Bidding: How do I give you my bid: at a branch, by email or online? What is your internal cut-off time before the 11:00 a.m. auction deadline?

• Payment: Must I hold an account with you to pay for winning bids?

• Statements: How do I see my holdings, coupons and maturities?

• Selling: If I want to sell a bond before maturity, can you do it, or do I need a stockbroker?

Step by step

1. Choose your CDP and ask for its CDS account opening checklist.

2. Fill the CDS application form. The Bank of Tanzania's form CDS/FORM/02 asks for your identity, contact details, TIN, tax status and the bank account where you want to be paid. See the documents you need.

3. Sign the specimen signature card and attach passport-size photos. These protect your account: instructions are honoured only with the signatures on record.

4. Submit everything to the CDP. The CDP checks it and opens your account in the CDS.

5. Get your CDS account number. Keep it safe: you will use it on every tender form.

Good habits

• Use a bank account in exactly the same name as your CDS account, so payments are not delayed.

• Keep copies of every form you sign.

• Update your CDP when your phone, email or bank details change.

Next step

Place your first bid, or go back to the investment journey.

Sources: Bank of Tanzania, Central Depository System Rules; Bank of Tanzania, Guidelines for Participation in Primary and Secondary Markets for Treasury Bonds (2022), section 6 (registered CDPs); Bank of Tanzania, CDS/FORM/02. This article is for education only and is not investment advice.