Here’s a quick guide to opening a Rwandan trading account and buying your first shares.
I emailed each of the ten brokers who are licensed to trade on the RSE. I asked them if they catered to foreign investors, how much they required to open an account, and what documentation was necessary. I found brokers listed below to be particularly helpful and responsive.
- FAIDA Securities Rwanda
- African Alliance Rwanda
- CDH Capital
- Baraka Capital Limited
- MBEA Brokerage Services Rwanda S.A & MBEA Financial Services
- Renaissance Capital
- Core Securities
- Dyer and Blair
- CFC Stanbic Financial Services Ltd.
- BDF(Busnes Development Fund)
- BK Securities Ltd
Commissions and fees amount to 1.50 to 1.71% of the total transaction value. This rate is standard across all brokers.
Note that the exchange requires that trades be for a minimum of 100 shares.
Opening a Rwandan Brokerage Account
Now let’s walk through the process of opening an account with a Rwandan stockbroker and buying your first shares.
Step 1: Complete the CSD Account Opening Form
The Central Securities Depository (CSD) records the ownership of Rwandan securities via electronic accounts. When you ask a broker to open a trading account, they will send you a copy of the CSD Account Opening Form. After completing and returning it to your broker, you will be assigned a CSD account number. This number will accompany every Rwandan stock trade you execute, allowing the CSD to keep record of all your holdings in the country.
Step 2: Complete the Broker’s Account Opening Form
After your first email to the broker requesting information on how to open an account, they may also send you a blank account opening form, which is sometimes referred to as the “Know Your Client” or KYC form. A sample form from CDH Capital may be found in the above table. The form typically requires disclosure of your passport number or other ID number, your address, and a signature sample.
Step 3: Collect two photocopies of your passport and two passport-size photos.
Step 4. Mail the original CSD form, account opening form, passport photos, and photocopies of your passport to your broker
You may email photocopies of all documents to your broker to get a head start on the account opening process, but they must eventually receive the original documentation. I recommend using a courier for this. It’s pricey but could save you a lot of grief in the event that the post office loses track of your documents.
Step 5. Wire Funds to Your Brokerage Account
After opening your trading account, your broker will provide you with its bank details so that you can fund your account. The most efficient way to do this is via wire transfer. If you haven’t sent an international wire before, I suggest that you take your broker’s bank details to your local bank branch and ask them to walk you through the process. They’ll make sure that your funds arrive securely. Note that most US banks charge about $25 for outgoing international wires.
Step 6. Submit a Trade Order
You’ve done your research and found a stock that you’d like to buy. What now?
All that needs be done is to submit a written trade instruction. Some brokers may have a special trade mandate form to complete, but, for others, a simple email may suffice.Keep in mind that many shares listed on the Rwanda Stock Exchange are rather illiquid, so I advise specifying a limit price for all of your orders. This will help you avoid paying significantly more for your shares than you had intended to pay.
Your broker will then execute your trade and send you a contract note that specifies the buy or sell price, commissions, and fees. Settlement of share trades takes up to three business days in Rwanda, so if you’ve sold shares, don’t expect to receive the proceeds of a sale before then unless you’re willing to incur a penalty to settle the trade more quickly.
An Important Note on Dividends
None of the Rwandan brokers that responded to me (except CDH Rwanda) would deposit dividends directly into a client’s brokerage account. You must instead opt to receive a dividend check denominated in Rwandan Francs or open a Rwandan bank account to collect the dividends. Because the teller at your local Wells Fargo branch will probably laugh in your face if you ever try to cash a Rwandan check there, your best option, unfortunately, is to open a Rwandan bank account.
Your broker should be able to assist you in connecting with a reputable bank and to help facilitate the account opening process. The CSD will be informed of your local bank details and will route all of your dividends there.
Follow these steps and you’re all set to begin investing in Rwandan stocks. That wasn’t too bad, was it?The process of opening a foreign brokerage account can be confusing. If you found this walk-thru to be clear as mud, please don’t be shy. Post your questions in the comments, and I’ll do my best to get answers for them.
Albert Einstein MX