The Central Securities Clearing System (CSCS) Plc was incorporated on July 29, 1992 as a Financial Market Infrastructure (FMI) for the Nigerian Capital Market. It was commissioned in April, 1997 and commenced operations in April 14, 1997. On the 16th of May 2012, CSCS became a Public Liability Company (PLC) by a special resolution.

The Securities and Exchange Commission issued its license as an Agent for Central Depository, Clearing and Settlement of transactions in the Nigerian Capital Market. It operates a computerized depository, clearing, settlement and delivery system for transactions in securities in the Nigerian Capital Market.

CSCS facilitates the delivery (transfer of securities from seller to buyer) and settlement (payment of bought shares) of securities transacted on the approved Nigerian Exchanges. It enables securities to be processed in an electronic book-entry form thereby substantially reducing the period it takes a transaction to commence and end.

CSCS has made visible strides in the Nigerian Capital Market and will continue to respond to the needs of the securities and commodities market to further enhance transparency and speedy settlement of transactions.

Functions

• Central depository for share certificates of companies quoted on The Nigerian Stock Exchange.
• Sub-registry for all quoted securities (in conjunction with registrars of quoted companies)
• Issuer of central securities identification numbers to shareholders; and
• Custodian (in conjunction with custodian member(s) for local and foreign instruments.

Delivery And Settlement Process Prior To CSCS

• In most cases, 3 months - 12 months to receive share certificates
• Cancellation and frequent issuance and re-issuance of certificates when sales occur.
• Constant signature verification
• Capital gains not exploited
• Some Dealing members sold what they did not have
• Numerous complaints on failed transactions
• Loss of certificates
• Risk was very high - undue delay, manually operated, manipulations due to long transaction cycle, minimal transparency, therefore generally lack of trust in the system

These problems were worldwide and needed solution, hence the need for a depository (CSCS PLC)