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Investors Embracing Direct Cash Settlement Remain Low – SEC

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The Securities and Exchange Commission (SEC) has said that investors’ acceptance of Direct Cash Settlement (DSC) still remains low.

Acting director-general of SEC, Ms. Mary Uduk, disclosed this on the sidelines of the First Capital Market Committee 2018 news conference in Lagos at the weekend.

Uduk said out of 5.1 million accounts with the Central Securities Clearing System (CSCS) only 1,191 had Direct Cash Settlement (DCS) subscriptions and only 15 out of 18 settlement banks had contributed to the DCS initiative.
She added that considering the fact that DCS would instil confidence in the market, there was the need for all parties involved in the process to work harder to achieve a 100 per cent migration.

In January 2016, as part of the ongoing initiatives to protect investors and eliminate fraudulent activities in the Nigerian capital market, SEC and the Nigerian Stock Exchange (NSE) commenced the Direct Cash Settlement initiative, which is the direct payment of proceed of sale of securities into an investor’s nominated bank account.

After two years of commencement, the Commission has been able to achieve 0.02 per cent as there is need for investors’ education on the initiative. Direct cash settlement is a process where cash proceeds from trades executed by brokers on the Exchange settles directly into investors’ bank account.

Other issues that were discussed according to her, were the committee that would look into new listing to the market. The acting DG explained further that the issue of increase in delisting of public companies was one of the highlight of their CMC deliberation.

“This poses a threat to the growth and development of the market in view of the fact that quite a number of them are highly capitalised companies. We are expecting the committee on listings would come up with strategies to attract new listings” she said.



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