Clearing & Settlement

As a Financial Market Infrastructure (FMI), CSCS Plc is the Clearing House of the Nigerian Capital Market.

Clearing is a post trade activity carried out before settlement. After the trade of a security has been initiated on the exchange, the exchange shares the data with CSCS Plc to begin the clearing and settlement process. 

The clearing process includes computation of brokers’ and Settlement banks’ obligations and advising them on the same. It is all the arrangements or activities done at the back office to ensure seamless transfer of money and the securities transacted.

On the other hand, Settlement is the fulfilment of the obligations which involve the transfer of money from the buyer to the seller, and securities from the seller to the buyer. CSCS Plc is at the centre of all the activities that make clearing and settlement possible.

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 Plc clearing system.
  • CSCS Plc 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