Compensation for DSL deposits starts Feb 8

February 7, 2012
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CMA CEO Stella Kilonzo/FILE

, NAIROBI, Kenya, Feb 7 – The Capital Markets Authority (CMA) will start the process of facilitating the payment of compensation to investors who incurred losses through Discount Securities Limited (under statutory management) from Wednesday.

The compensation will be drawn from the Investor Compensation Fund established under the Capital Markets Act which is managed by CMA.

The Authority’s competitively procured service was awarded to the Co-operative Bank of Kenya Limited. The purpose of this arrangement is save customers the inconvenience and costs of travelling to DSL offices in Nairobi for purposes of obtaining their monies.

While confirming the new development, CMA Chief Executive, Stella Kilonzo said the compensation process will be undertaken in phases with the objective of settling the majority of claims as soon as possible.

”In the first phase of the compensation exercise set to start on February 8 investors will be paid a maximum compensation amount of Sh10,000 with the balance payable in the second phase of the compensation process,” Kilonzo said.

The CMA Chief Executive explained that under the Service Agreement, Co-operative Bank will be the central coordinator for investor compensation services including free opening and maintenance of bank accounts for purposes of customer identification and verification; processing and facilitating the transfer of funds, receiving claim forms from the clients and forwarding the claim forms to CMA for processing and approval for payment.

To be able to open bank accounts the claimants are advised to carry with them the necessary identification documents including original IDs/Passport and Certificate of Incorporation (for companies). Joint account holders and companies should have the identification documents used during the opening of CDS accounts.

Applicants are expected to lodge their claims by completing forms which shall be provided together with the account opening papers and for this purpose, clients are expected to have their Central Depository System (CDS) account numbers or the DSL account statements and original identification documents. This is to be able to provide evidence of claim against DSL.

The Co-operative Bank of Kenya Limited has a countrywide branch network hence clients will be in a position to access their funds at the branch nearest to them.

The compensation process is expected to run for the next six months with effect from February 8 up to August 2012 and all genuine claimants are expected to have presented their claims within the set period.

Kilonzo further added the compensation should inject optimism and enhance investor confidence in the capital markets system.

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