Central security clearing system limited (CSCS) was founded in April 1997 as parts of efforts that are geared to towards making the Nigerian stock Exchange (NSE) more efficient and investor friendly. It commenced operation in the April 1997 as the clearing house of NSE
The goal of CSCS is to become a top central securities depository that will be respected worldwide and her mission statement is to create value through the provision of securities depository, settlement, clearing and many other related services based on modern technology and highly specialized workforce.
The function of Central Security clearing system is custody services, central depository as well as settlement and clearing of securities. Since its establishment, CSCS had been able to computerize processes like settlement and clearing. Apart from that, it has also been able to centralize operation.
Mr Kyari Abba Bukar is the present Managing director and the CEO of the Central Security Clearing System. He also serves as the chairman of the board.
Advantages of Central Security Clearing System
The benefits of the Central Security Clearing System are:
- Increasing the liquidity of stock
- Reduces the cases of stolen certificate or late delivery of certificate
- Reduces the maintenance cost of shareholder and register
- Promotes transparency of market
- Encourages foreign investors
- Reduces operating cost
- Boost the profitability and efficiency of stock broking
- Minimizes risk associated with investments and provides avenue for speculation
The Operational Guidelines of CSCS
- Deposits Share Certificates
Up till now, stockbroker must deposit authenticated securities with CSCS at least a day before transaction is carried out on them at the trading floor. This is very important as it ensures that the shares to be traded were in CSCS’s custody. By implication, anyone that buys a stock will be assured of the availability of the shared bought.
- Trading Accounts
The operations of the CSCS requires the stock broking firm to deposit money into their trading account in any of their authorized bank before proceeding to the trading floor. With this procedure, the seller is assured that the money for payment has been deposited in the trading account.
- Settlement of Trades
The Central Security Clearing system limited sends data of clear trades to the settlement banks before 5pm on every working day. The duty of the settlement bank is to process the data information collected from CSCS. This is done by effecting settlement via Nigerian Inter-Bank Settlement System and crediting and debiting the accounts of the concerned stockbrokers.
- Clearing of Trades
The CSCS is responsible for clearing and settlement of trades. The back office of the Nigerian Stock Exchange sends the information regarding the trade done to the CSCS before 4pm. The data is then processed for settlement by that settlement bank.
- Registrar Information
Certificates in the custody of CSCS are entered in electronic-book form. After which they will be dematerialized and recycled to appropriate registrars. This must be done within 48 hours. The securities must be scrutinized and verified against the available records and any forgery discovered should be reported to CSCS within 48 hours.
The Address of CSCS Nigeria
Central Securities and Clearing System Plc is located at first floor stock exchange house, 2/4 customs street, Lagos, Nigeria.
Telephone: +23419033552, +234190333553