WHAT WE DO
Clearing and Settlement
CSCS provides clearing and settlement services for transactions executed on the various securities exchanges. This includes:
- Matching and confirmation of trades.
- Netting of obligations.
- Delivery versus payment (DVP) settlement of securities and funds
CSCS acts as the central counterparty, guaranteeing settlement of all confirmed trades. This helps mitigate counterparty risk for market participants. The clearing and settlement process at CSCS involves:
- Trade confirmation.
- Netting of obligations.
- Delivery versus payment (DVP) settlement of securities and funds on the settlement date
CSCS has robust risk management practices and default handling procedures to ensure orderly and timely settlement of trades, even in the event of a participant default.
The clearing and settlement services provided by CSCS help promote confidence, transparency and efficiency in the Nigerian capital market.
Securities cleared and settled by CSCS Plc include:
BONDS:
CSCS Plc actively clears and settles State bonds, Corporate bonds, Agency bonds, Federal bonds and Supranational bonds.
EQUITIES:
All registered shares traded on partner exchanges are cleared and settled by CSCS Plc.;
MONEY MARKET INSTRUMENTS:
Money market instruments cleared and settled by CSCS Plc include;
- Treasury Bills: CSCS Plc clears and settles Treasury bills issued by the Central Bank of Nigeria (CBN).
- Commercial Papers.
- Bankers Acceptance.
SETTLEMENT PROCESS
Settlement Cycle for Equities
At Day T+0 (i.e Transaction Day)
- Execution of trades on the floor of the Exchange by Brokers/Dealers.
- Matched and confirmed trades are transmitted to CSCS Plc clearing system.
- CSCS Plc sends net financial obligation (interim settlement report) to stockbroking firms, custodian and settlement banks by 4:00 pm (GMT+1) daily.
Day T+1
- Settlement bank escalates any unfunded cash settlement account to CSCS Plc on or before 12:00 pm.
- CSCS Plc sends final net settlement advice to all Settlement Banks before the end of the day; reporting final and irrevocable settlement obligation.
Day T+2
- CSCS Plc sends the NIBSS settlement report by end of day reporting final and irrevocable settlement obligation for all settlement banks.
- Stockbroking firms/custodians must have funded their settlement accounts with the bank on or before 4:00 pm.
- Settlement banks to escalate final unfunded cash settlement account to CSCS Plc before the close of business (4:30 pm).
Day T+3
- Securities settlement takes place at CSCS Plc at 8:00 am.
- NIBSS cash settlement takes place at 8.00 am.
- NIBSS sends settlement confirmation to CSCS Plc.
Settlement Cycle for Debt Securities (The Exchange)
At Day T (i.e Transaction Day)
- Execution of trades on the floor of the Exchange by Brokers/Dealers.
- Matched and confirmed trades are transmitted to CSCS Plc clearing system.
- CSCS Plc sends net financial obligation (interim settlement report) at the end of the day to stockbroking firms, custodian and settlement banks by 4:00 pm (GMT+1).
Day T+1
- Settlement bank escalates any unfunded cash settlement account to CSCS Plc on or before 12:00pm.
- CSCS Plc sends final net settlement advice to all Settlement Banks before end of the day; reporting final and irrevocable settlement obligation.
- CSCS Plc sends the NIBSS settlement report before the end of the day, reporting final and irrevocable settlement obligation for all settlement banks.
- Stockbroking firms/custodians must have funded their settlement accounts with the bank on or before 4:00 pm.
- Settlement banks to escalate final unfunded cash settlement account to CSCS Plc before the close of business (4:30 pm).
Day T+2
- Securities settlement takes place at CSCS Plc at 8:00 am.
- NIBSS cash settlement takes place at 8:00 am.
- NIBSS sends settlement confirmation to CSCS Plc.
Settlement Cycle for Debt Securities (OTC)
- The Exchange transmits pre-matched trades to CSCS Plc clearing system latest by 10:00 am on Settlement day (Day T + 2),
- CSCS Plc validates trade parameters and forwards status report to the Exchange for corrections where applicable.
- All corrections must be reported to CSCS Plc clearing system within thirty (30) minutes after notification.
- On Settlement day, CSCS Plc will effect the delivery of securities and advise the Exchange accordingly.
- Primary Dealers Market Makers (PDMMs)/Dealers that subscribe to CSCS Plc online services can view their bond portfolio via the website
