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.
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