From CDSC Account Sign-Up to Success: How to Start Trading Shares in Kenya and Make Money

🧾 Opening a CDSC & Broker Account – Your Entry into the Stock Market

Before you can buy or sell shares on the Nairobi Securities Exchange (NSE), you need two key accounts:

📘 A. What Is a CDSC Account and Broker Internal Account?

✅ CDSC Account

CDSC stands for Central Depository & Settlement Corporation. A CDSC account is like your digital wallet for shares — it holds your stocks securely in your name.

Think of it like an M-Pesa wallet, but instead of cash, it stores stocks.
Whenever you buy or sell shares, your CDSC account is updated to reflect your ownership.
It is mandatory for anyone trading on the NSE.

✅ Broker Internal Account (Client Trading Account)

This is the account you open with your stockbroker such as AIB-AXYS Africa. It helps you:

Deposit money via M-Pesa or bank transfer
Place buy/sell orders online
Track your trades and portfolio in real-time

🏦 B. Choosing a Licensed Stockbroker

You cannot open a CDSC account directly. You must go through a licensed broker. The broker:

Helps open both CDSC and trading accounts
Provides trading platforms like Digitrader
Handles order execution and settlement
Gives you access to market insights and customer support

Popular licensed brokers in Kenya include:

✅ AIB-AXYS Africa

📝 C. How to Open Accounts (Step-by-Step)

Option 1: Online (Recommended)

Visit: Open Account Here
Fill the online form
Upload ID, passport photo, proof of address
Wait 1–3 days for approval

Or you can use AIB Digitrader App to open

Option 2: Visit Broker Office

Go to the broker’s office
Fill out physical forms
Submit hard copy documents
Wait for account creation and login details

📑 D. KYC Requirements (Know Your Customer)

To comply with CMA regulations, you must provide:

🆔 Copy of National ID or Passport
📸 Passport-size photo or selfie
🏠 Proof of address (utility bill, lease agreement, or official letter)
📱 Active phone number and email
💳 Bank or M-Pesa details with statement for withdrawals

✅ Once your CDSC and trading accounts are set up, you’re ready to start investing in shares, bonds, and other assets on the Nairobi Securities Exchange.

🏦 How Do You Fund the Account?

There are three main ways to deposit money into your trading account:

✅ a) M-Pesa

This is the fastest and easiest method.
Use Paybill number: 548800 for AIB-AXSY Africa
For the account number, type your CDSC number (this is your unique trading account ID).
Example:
- Paybill: 548800
- Account: 1234567
You’ll receive confirmation within a few minutes.

✅ b) Bank Transfer

You can also send money from your bank account to the broker’s bank account.
AIB-AXYS Africa lists bank details on their website, app, and online portal.
Note: Bank transfers may take a few hours or even up to 24 hours to reflect.
Make sure to send confirmation for receipting.

✅ c) In-App STK Push or Portal Option

You can use the broker’s app or online portal to initiate an M-Pesa STK push directly to your phone.
Approve the STK Push, and the money will be sent instantly.

🔓 First-Time Deposit – KES 3,000 Minimum

To activate your new trading account, you need to deposit at least KES 3,000.
You can use this money to buy your first shares.
It's like opening a bank account — there’s a small minimum to get started.

⚡ Real-Time vs. Delayed Deposits

M-Pesa: Instant. You can start trading in minutes.
Bank Transfer: Slower. It might take longer to reflect — check with your broker.

📊 How Does Buying or Selling Shares Work in Kenya?

Buying or selling shares on the Nairobi Securities Exchange (NSE) might sound complex, but it's a smooth process once you understand the steps. Here's a breakdown for beginners:

🛒 1. You Place a Buy or Sell Order

You start by instructing your licensed broker (like AIB-AXYS Africa) to either:

Buy a specific number of shares (e.g., Safaricom)
Sell shares you already own

This can be done via:

Online platforms (e.g., AIB Digitrader or portal)
Email or call to broker
In-person at a brokerage office

Example: You decide to buy 1,000 Safaricom shares at KES 17. You log in and place a Buy Order.

⚙️ 2. Order Goes to NSE Matching Engine

Once placed, your order enters the NSE trading system. This system looks for matching orders from other investors.

Buyers are matched with sellers
Matching follows price-time priority – better prices and earlier orders get filled first

Example: Your Buy Order at KES 17 is matched with someone selling 1,000 Safaricom shares at the same price.

🤝 3. Matching Based on Price and Time

If someone is already selling at your price or lower, your order is matched instantly. If not, it stays in the queue until a seller accepts your price.

🔄 4. CDSC Handles Settlement – T+3

Once matched, the Central Depository & Settlement Corporation (CDSC) manages the transfer:

Shares are moved from the seller’s CDS account to yours
Money is moved from your broker to the seller’s broker – after 3 working days (T+3)

📦 5. Share Movement

The shares show in your CDS account on trade day, but you can't resell them until T+3 (they’re locked for settlement).

Think of it like paying online – you’ve ordered it, but delivery happens a few days later.

💰 6. Money Movement

Buying: Your broker sets aside your funds until T+3, then pays the seller's broker.
Selling: Your broker receives payment on T+3, and sends it to your bank or M-Pesa.

You can also request early settlement with a small fee (usually 5%).

🧠 Summary:

Action	Shares Move	Money Moves
Buying Shares	From seller → you	From you → seller
Selling Shares	From you → buyer	From buyer → you

📌 Bonus Tip:

Use market depth on platforms like Digitrader to see current buyer/seller queues and price levels before placing an order.

✅ Want to start investing? Open your trading account here.

📊 What Really Happens When You Buy or Sell Shares (Explained for Beginners)

🛒 Buying Shares — Step by Step

Placing the Buy Order:
You log into your trading platform (like AIB Digitrader or the AIB-AXYS Online portal) and select the shares you want to buy.
Example: You decide to buy 100 Safaricom shares at KES 20 each, totaling KES 2,000.
Order Sent to the Market:
Your broker submits your order to the Nairobi Securities Exchange (NSE). If you're using the online portal or app, it uses Direct Market Access (DMA) for fast execution.
Matching the Order:
If someone is selling those shares at your chosen price, your order is matched. Shares are reserved for you, but not fully settled yet.
CDSC Transfers Shares:
The Central Depository & Settlement Corporation (CDSC) moves the shares from the seller’s CDSC account to yours. However, the shares remain “pending settlement” until T+3.
Money Movement on T+3:
On the third business day (T+3), your broker sends your KES 2,000 to the seller’s broker, who transfers it to the seller. You now officially own the shares.

💰 Selling Shares — Step by Step

Placing the Sell Order:
You choose to sell your shares through the trading platform.
Shares Debited:
Once matched, the shares are debited from your CDSC account immediately.
Payment Processed on T+3:
The buyer’s broker sends money to your broker on T+3, and the broker deposits it to your bank or M-Pesa.
Early Payment Option:
Some brokers like AIB-AXYS offer early payouts before T+3 for a small fee (usually 5%).

📅 What Does T+3 Mean?

T+3 stands for Trade or Transaction date + 3 business days.

If you buy/sell shares on Monday (T), settlement is completed on Thursday (T+3).
Public holidays or weekends can delay this timeline. imple reason, banks dont work on these days.

💡 Simple Summary

Buying shares is like ordering online — you pay now, but full delivery (settlement) takes 3 days.
Selling shares is like selling a product — you deliver now, and get paid after 3 days.
CDSC ensures the safe movement of shares.
Brokers handle your cash and market orders.
The NSE is the official marketplace where trades happen.

✅ Pro Tip: Always check your portfolio to see if shares are “pending” or “free to trade,” and use limit orders to manage buying/selling prices or market orders for fast execution.

💰 How You Earn (or Lose) Through Shares – Explained for Beginners

When you invest in shares (also called stocks), you’re putting your money into real companies — like Safaricom, KCB, or Equity Bank — with the hope that the company will grow and your investment will increase in value (capital gains). But just like in business, there are profits and risks.

✅ Ways You Can Earn from Shares

📦 Dividends – Profit Sharing

When a company makes profits, it may decide to share part of that profit with its shareholders. This payment is called a dividend.
Some companies pay dividends once or twice a year. Example: KCB Group.
Example: If you own 1,000 KCB shares and the company pays KES 1.50 per share:
1,000 × 1.50 = KES 1,500 deposited to your trading or bank account.

📈 Capital Gains – Buy Low, Sell High

This is when you profit from the rise in share price.
Example: Buy Safaricom at KES 17, sell at KES 22:
Gain = 22 - 17 = KES 5 per share
1,000 shares = KES 5,000 profit

🎁 Corporate Actions – Bonuses, Splits, Rights

Companies may offer bonus shares, stock splits, or rights issues.
Example: Bonus 1:1 means for every 1 share, you get 1 free. If you had 1,000 shares, you now have 2,000.

📢 Want to Earn from Referrals? 💸

Did you know you can earn commissions by referring friends, family, or group members to open individual trading account?

Use your referral code or link found on your AIB Digitrader app or web portal.
You’ll earn 50% commission share on fees your referral pays for every trade— for a full year!
Commissions are credited directly to your trading account.

🔗 Use this link to get started with your account: Open Account with Referral Code: REF176

🎯 Ready to invest and earn? Sign up today and invite others too!

❌ Ways You Can Lose Money in Shares

📉 Market Risk – Price Drops

The share price may drop after you buy.
Example: Buy Safaricom at KES 22, price falls to KES 17:
Loss = 22 - 17 = KES 5 loss per share
1,000 shares = KES 5,000 loss if you actually sell.

🚫 No Dividends

Not all companies pay dividends every year.
If the company has low profits or losses, they may skip dividend payouts.

🛑 Poor Company Performance

Bad results, scandals, or negative news can cause share prices to drop.

🛡️ What If My Broker Goes Out of Business?

Your shares are safe because they are held by CDSC (Central Depository and Settlement Corporation).
CMA (Capital Markets Authority) will help you transfer your shares to another licensed broker.
Your shareholding remains unchanged — you do not lose your investment.

Important Tip: Don’t leave your money with the broker. Always either: