Tanzania’s Central Bank has issued new guidelines for residents of the East African Community (EAC), SADC region and Tanzanian citizens in the diaspora to participate in the primary auctions and subsequently secondary trading of securities issued by the Government of Tanzania.
The Government securities that shall be traded include the Treasury bills of 182 and 364 days’ maturity and Treasury bonds of 2, 5, 7, 10, 15, 20 and 25 years’ maturity.
According to public notice issued by the Bank of Tanzania (BoT), residents of EAC, SADC and Tanzanian citizens in the diaspora are required to open securities accounts through the registered Central Depository Participant (CDP).
CDPs are banks licensed under the Banking and Financial Institutions Act and Broker-Dealers licensed under the Capital Markets and Securities Act in Tanzania.
CDPs are required to observe and ensure that the process of opening securities accounts for investors from other EAC and SADC regions, and Tanzanian citizens in diaspora involve market intermediaries licensed by the Capital Market Authority or Central Bank of the respective countries. In so doing, all market intermediaries will be required to adhere to the Anti-Money Laundering (AML) and combating financing of Terrorism (CFT) regulations.
According to the notice, secondary trading of Treasury bonds shall take place at a Stock Exchange in Tanzania that has been approved by the Capital Markets and Securities Authority. An investor wishing to buy or sell Treasury bonds shall approach the Dar es Salaam Stock Exchange (DSE) through a licensed broker/dealer to obtain details on trading procedures and the settlement currency shall be in Tanzanian Shillings.
“To make payment and receive proceeds in respect of securities transaction, an investor shall open and maintain a Securities Settlement Account with a bank or financial institution or appoint a custodian in Tanzania,” the notice said.
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