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CDS Accounts for kids.
Rank: Elder Joined: 7/22/2009 Posts: 7,460
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I wanted to open a CDS account for my daughter but apparently (As per a stock broker I consulted), I can't. I wanted the CDS account to be in my daughter's name. The idea is to be buying and selling shares on her behalf and hopefully, when she's 18 she'll have a portfolio and cash to boot. The stock broker told me that being a minor, and therefore not legally allowed to enter into any financial agreements she can't have an account in her name. I refuse to believe this and if it is true then it is a very stone age approach to life because I can register property in her name and also open bank accounts in her name. Why not a CDS account? I don't want to buy her shares in my name - I want the transactions to be totally independent! Any advice? Anyone investing in the NSE on behalf of their kids? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 8/16/2006 Posts: 4
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@Black, I think the Law is pretty clear where a transaction regarding a minor is concerned a guardian will be representative. This however has been greatly undermined in Kenya with the weak regulations that we currently have. You can undertake transactions for a minor in your name. You can gift your daughter the securities when she comes of age. This might be a pretty lay man perspective but I do believe a GOOD SANE Lawyer will be able to guide you appropriately, However don't let hurdles deter you from a good cause. Invest for your Daughter and Bravo on this
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Rank: Elder Joined: 7/22/2009 Posts: 7,460
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@ jikome - I want the CDS Account to be in her name. If I have it in my name while I'm also trading on my behalf, the boundaries will become blurred with time. This becomes even more complicated if you want to invest for more than one kid. At one point, the question will be who owns what? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/22/2009 Posts: 7,460
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Guys guys, help a brother here. No one has information on this? @Pretty - You once said that your father was buying shares for you when you were young. How did he go about it? @Njung'e? Wendz? Vitu? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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@MaichBlack,
Why don't you just contact the CDSC guys directly and ask them this question and then post their answer here?
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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@maichblack you may be fighting a losing battle... i dont see why you dont just be her/his representative until they are 18... you cant talk about boundaries becuause either way it will still be you who manages the account... Mark 12:29
Deuteronomy 4:16
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Rank: Member Joined: 5/8/2009 Posts: 263 Location: Gigiri, Nairobi
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@Maichblack  Hello brother Ever heard of nominee account Yes, you can open one even for the unborn kid. However, try this guys for a change - Bluechip Equity Capital You will marvel Ask them your questions and if not satisfied, go the nominee way. That way, you will avoid the Matiba, kiereini, wanjigi children share inheritance struggles All the love brother >>>>>>
A thing of beauty is a joy for ever:
Its loveliness increases;
It will never pass into nothingness;
But still will keep a bower quiet for us,
and a sleep full of sweet dreams,
and health, and quiet breathing. - Keats
>>>>>>>In life,there are three classes of people,
1. Those who make things happen,
2. Those who watch things happen
3. And those who ask what happened.
Where do you fall?
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Rank: Veteran Joined: 11/30/2006 Posts: 635
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Have done this before. You can open an account with your name and hers as joint....
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Rank: Elder Joined: 6/20/2007 Posts: 2,037 Location: Lagos, Nigeria
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You need a nominee account for this purpose instead of a direct CDS sccount. Dyer & Blair (Nomura nominee account) is one of them. They can open account for minor the only recent snag from D& B is that you must trade on the account at least once in 3 months. We have left our kids account dormant as we bought only blue chips for long term for them (EABL, KCB, BBK, ARM) The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Member Joined: 5/8/2009 Posts: 263 Location: Gigiri, Nairobi
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@Young Hello broda Are you back in the country? Stay young keep your wheels in motion When you jog slowly but go far, you use up energy stored in your body fat. Where does the energy for Usain Bolting come from? Vote yes for the new Katiba >>>>>>
A thing of beauty is a joy for ever:
Its loveliness increases;
It will never pass into nothingness;
But still will keep a bower quiet for us,
and a sleep full of sweet dreams,
and health, and quiet breathing. - Keats
>>>>>>>In life,there are three classes of people,
1. Those who make things happen,
2. Those who watch things happen
3. And those who ask what happened.
Where do you fall?
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Rank: Elder Joined: 2/16/2007 Posts: 2,114
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@Pretty,
Wrong #,Young is in Naija.
BTW have you read the katiba document?
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Rank: Elder Joined: 6/20/2007 Posts: 2,037 Location: Lagos, Nigeria
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@ALL, I work and live in Nigeria, I have always been here (nigeria). I only invest in Nairobi Stock Exchange as a non resident foreigner and other markets overseas. Young, Nigeria The wazua spirit as members is to educate and inform and learn from others within the limit of what we know in any chosen area irrespective of our differences in tribes, nationalities, etc. .
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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@MaichBlack, general common law rules: - A minor has no capacity to enter into contracts/ buy property. There are exceptions though - A girl between 16 and 18 may get married with parents's consent, a minor can be a partner in a business but cannot be active in running the business etc. - The parent/guardian can run the investment account as the minor's representative or trustee. - See a lawyer for a simple trust deed. Life is short. Live passionately.
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Rank: Member Joined: 8/16/2006 Posts: 4
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@Black, I think Sparkly is on to something, as a professional in the industry, the Kids will probably rely on the parents to make judgement, and fund the account anyway .. so why not be the asset guardian till they are of age? Think about it.
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Rank: Veteran Joined: 7/24/2008 Posts: 781
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I have come to realize that my stocks portfolio will be left to my children if the end of the world doesn't come.I hope to leave them a sizeable fortune. The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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Read This: In his early teens, Jesse Livermore left home to escape a life of farming. He went to Boston and started his long career in stock trading by posting stock quotes for the Paine Webber brokerage firm. He then began trading for himself and by the age of fifteen, he had reportedly produced gains of over $1,000, which was big money in those days. Over the next several years, he made money betting against the so-called "bucket shops," which didn't handle legitimate trades – customers bet against the house on stock price movements. He did so well that he was banned from all of the shops in Boston, which prompted his move. AND THIS WAS IN 1982! IN THE US. How come 128 years later in modern Kenya, a person cannot buy stocks below 18 years? We re still over a century behind developed countries. We need to change these archaic laws. Are you saying that a 16 year old girl/boy cannot transact shares in the NSE? CRAZY! GOD BLESS YOUR LIFE
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Rank: Elder Joined: 7/22/2009 Posts: 7,460
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@ You can't stop a long name - I hear you! Times are changing. Kids are becoming smarter. This issue of saying a 16 year old can't trade is utter nonsense. We have kids as young as 12 in rural Kenya running successful (albeit small scale) businesses!! Ever gone to a village and met a primary school kid rearing and selling rabbits & chicken, planting and selling vegetables of all kinds in a ka-small shamba and all these while he is still attending classes at the local primary school? Kids should be allowed to trade - maybe with some control - if their 'environment' allows them to. I have met 13 year olds who are way smarter than 20 year olds. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 8/16/2006 Posts: 4
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In Modern Kenya, a hundred years trailing developed nations, we still have a law that defines minors and their lack of a contractual obligation, which is what happens when a person buys/sells a security. Please see todays exposed guidelines on Child accounts.
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Rank: New-farer Joined: 1/7/2010 Posts: 68 Location: kenya
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@Black.....i have worked with a stockbroker and i want to give you facts
1. If you trade using your name, when your daughter gets to 18 years and you want the account to read her name( Which is not possible), this is treated like a Private Transfer. You are the seller, your daughter s the buyer, so commission s deducted twice...... not good. You would rather sell and then buy shares for her.
2. Again it can be treated as a Transmission.... since the account s supposed to read a different name( which s not possible). In CDSC, Name and status( LI,FI LC ETC) CAN NEVER BE ALTERED!!!! since what s used to open a cdsc account is an ID number, Passport.... which are unique.... the account is yours.. PERIOD!!!!
3. What i can advice you is to buy shares and convert them to share certificates under her name... that may require swearing an affidavit and other formalities which the lawyer n cdsc will advice you.Later your daughter can open a cdsc account and immobilize her share certificates.
4. Also if your daughter has a passport, some brokers can agree to open a cdsc account using her passport. What can happen s u just invest( buying n selling) but not request to be paid.
5. The best of all is... Open a joint account with your daughter... of course your ID will be used. A joint account, both parties or 1 party can transact. SO when she gets to age, she can continue operating it as you withdraw.. after-all.... she s your daughter.
I hope ive assisted you.
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