The Securities and Exchange Commission, SEC, in conjunction with the Nigerian Stock Exchange, NSE, yesterday, said that effective January 4, 2016, the direct cash settlement initiative will take off in the Nigerian capital market.
This was made known by the Steering Committee on Direct Cash Settlement, DCS, in a statement yesterday. The committee maintained that with the effective take-off of direct cash settlement, investors in the Nigerian capital market would be credited directly with the net proceeds of stock market transactions which would address the illegal sale of investors’ securities.
Direct Cash Settlement is a process where cash proceeds from trades executed by brokers on the Exchange settles directly into investors’ nominated bank accounts. DCS is aimed at improving transparency, entrenching investor confidence, reducing market infractions and improving trading velocity.
Basically, the process starts when a client gives his broker the mandate to sell his or her shares. Once those shares are sold, payment is made directly into the client’s account.
