One of the most trending topics in Nigeria’s political landscape now is the plan of the Federal Government to borrow unclaimed dividends and monies in dormant bank accounts.
Can you stop the FG from taking that action? Definitely NO! Because the FG is invoking the Finance Act 2020.
But you can take a step right now to withdraw your unclaimed dividends. That’s the only way to prevent the government from withdrawing funds in your investment portfolio.
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What does the Finance Act say regarding Unclaimed Dividends?
Under Part XII of the Act, it’s clearly stated that dividends were special debts due to and recoverable by shareholders within 12 years, and actionable only when declared.
The Act also says dividends that were unclaimed after 12 years should be included in the profits that should be distributed to the other shareholders of the company.
The Act says:
“Such unclaimed dividends transferred to the Unclaimed Funds Trust Fund shall be a special debt owed by the Federal Government to the shareholders and shall be available for claim by the shareholder at any time, pursuant to the aforementioned perpetual trust”
SEARP Says It’s Illegal To Borrow Unclaimed Dividends
The Socio-Economic Rights and Accountability Project (SERAP) described as illegal, the plan of the Buhari-led government to borrow unclaimed dividends and funds in dormant accounts.
The group’s deputy director, Kolawole Oluwadare, said:
“Borrowing unclaimed dividends and funds in dormant accounts amount to an illegal expropriation, and would hurt poor and vulnerable Nigerians who continue to suffer under reduced public services and ultimately lead to unsustainable levels of public debt.”
So, let’s get started!
If you’ve heard stocks professional mention CSCS account and you’re wondering what the hell it means, don’t worry we’ll guide you on how to trade stocks with it and how to use this account to check your shares online real-time.
You can also use CSCS account to get back unclaimed dividends in an easy to follow the process.
We’ll also share with you list of active certified active stockbrokers in Nigeria who can professionally guide you on how to go about trade stocks and how to get back unclaimed dividends through Central Securities Clearing System.
So, let’s get started, but first, you might want to ask…
Why do I need to open CSCS account?
Be it an investment in shares of quoted companies, or in unquoted shares traded at the OTC platform or investment in government bonds; you need a CSCS Account.
This is because it is one of the requirements for investing in securities traded in Nigerian capital market.
Directive from the Security and Exchange Commission (SEC)
A few years back, a deadline was issued by the Securities and Exchange Commission to completely do away with the issuing tangible share certificates and to keep all investment in shares electronically.
It is of interest to know that with a CSCS account, it is easier to monitor your investment portfolio.
Through this, your investment is safe and makes it easy for you to find shares in your name. Your dividends are deposited in your CSCS account if you have one.
But first…
What is CSCS?
CSCS is an acronym for Central Securities Clearing System. The Central Securities Clearing System Plc is a subsidiary of the Nigeria Stock Exchange (NSE).
In 1997, It started operations as the major financial infrastructure for the Nigerian capital market.
Hence, the CSCS is the Central Depository for the Nigerian capital market with the responsibility for storing, clearing and settlement of securities transactions.
Roles of CSCS in Nigeria
To be more specific, we can classify the roles of the Central Security Clearing System in the Nigerian capital market as follows:
- It is the Central depository for share certificates of companies quoted on The Nigerian Stock Exchange.
- It serves as a Sub-registry for all quoted securities.
- It issues central securities identification numbers to shareholders; and
- It serves as the guardian for local and foreign instruments.
- For effective performance in this role, the CSCS functions through a digital depository system.
- To have a proper understanding of this concept, think about your relationship with your bank.
Whenever you make some money, you will be faced with the option of either keeping the cash with you (shelf, wallet, wardrobe) or depositing it in your bank account.
Also, for you to know the total amount of money you have in your bank account, you will need your statement of account from your bank.
And if there is any need for your money you simply withdraw it through any of the withdrawal channels.
So then what’s the purpose of keeping your money in your account rather than in your possession?
I believe you do so because it is more secured and it will probably yield profit over a period of time.
That is how it works when you acquire a company’s and you are given a share certificate as proof of your investment, now it’s in your discretion to either keep the share certificate in your possession or deposit it with the CSCS for safety.
How CSCS Operates
The CSCS keeps it secured digitally. Every other investment you may make via the secondary market will also go into your CSCS account.
Just like the banks, anytime you wish to know the number of shares you have, you request for your account statement with the CSCS.
On it will be shown the companies you invested in, the volume of shares you hold in each of these companies including the worth of the shares as at the date of issuing a statement.
The CSCS opens an account and assigns an account number to every shareholder who entrusts their shares with them. With this unique account number, you can acquire more shares, trade what you already have, or even transfer ownership to your dependent as you deem fit.
The CSCS was created to aid in strengthening the capital market and ensure investors have a better investing experience.
Prior to the establishment of the CSCS, there were inadequacies in the system which discouraged investors from investing.
For instance, delivery of share certificates could be between 3 months to 12 months thereabouts and settlement of transactions could take several weeks.
Verification of signatures was an enormous task and was the main reason why transactions were not enabled easily.
There were also cases where certificates were misplaced, lost and even stolen. Above all it was an easy way for dubious stockbrokers to sell investor’s shares in an unapproved manner.
The total market risk was very high due to undue delay in processing trades. And these delayed transaction cycle gave opportunity for manipulations by operators. Above all, there was general lack of transparency and trust in the market.
How to Open CSCS Account
- Step 1: Check the list of accepted and approved stockbrokers on the official website of the Nigerian Stock Exchange and on the website of the Securities and Exchange Commission.
- Step 2:Approach a registered stockbroker.
- Step 3: Stockbroker will have to create an account for you with his firm to trail your Step 4: Your CSCS account will be processed after supplying the required documents (whether as an individual or corporate account, see below.)
- Step 5:After a satisfactory review of the documents, your stockbroker will then prepare the account opening documents.
- Step 6: Your stockbroker examines and forwards the documents to CSCS where the Step 7: Your CSCS account is ready you’ll then receive a trading account number and a Clearing House number (CHN).
Note: The Clearing House Number (CHN) links your account to the stockbroking house.
Types of CSCS Account in Nigeria
There are two types of CSCS account in Nigeria, they are:
- Individual account
- Corporate account
Requirements for Individual account CSCS account opening
- Brokerage Account Opening Forms
- A CSCS Account Opening Form
- A Passport Photo
- Utility Bill
- A means of Identification (either of National ID, Drivers’ License, International Passport).
Requirements for corporate account CSCS account opening:
- Brokerage Account Opening Forms
- A CSCS Account Opening Form
- A Passport Photo
- Utility Bill
- A means of Identification (either of National ID, Drivers’ License, International Passport).
- Incorporation documents of the company.
- Board resolution approving the opening of the investment account will be required.
Advantage of Special CSCS account?
The advantage of having special CSCS account is that you alone have control of your portfolio as the account is not linked to any stockbroking firm and with this, your stock broker will not be able to manipulate your account or transact on it without your approval.
The problem accompanying a regular cscs account is that your stockbroker has uninterrupted access to it due to the fact that it is tied to the stockbroking firm.
There have been instances where crooked stockbroking firms sell off stocks out of the portfolio of their customers without due authorization.
Subscribing to the CSCS Trade Alert is one sure way of knowing what happens in your account. With this you are notified anytime a transaction takes place in your account and that will let you know if your broker is fondling your account suspiciously.
Opening a CSCS account is a vital prerequisite for investing in the Nigerian Stock Exchange.
Here are some questions you might want to ask:
How can I check the value of my shares in Nigeria?
Answer: To check the value of your shares in Nigeria, you can go to the website of the Nigerian Stock Exchange and download daily stock prices or check CSCS official portal.
Once you know the price, multiply it by the number of shares on your share certificate and you can easily determine the value.
How can I find stockbroker in Nigeria for me open CSCS account?
Answer: Kindly head straight to NSE website, navigate through and click on dealing members. On this page you’d find the full list of certified of stockbrokers in Nigeria.
Active Stockbrokers in Nigeria:
- Supra Commercial Trust Company Limited
- Tellimer Capital Limited
- The Bridge Securities Limited
- Tiddo Securities Limited
- Tomil Trust Limited
- Topmost Securities Limited
- Absa Securities Nigeria Limited
- ARM Securities Limited
- Arthur Stevens Asset Management Limited
- Associated Asset Managers Limited
- Atlass Portfolio Limited
- Ava Securities Limited
- Bauchi Investment Corporation Securities Limited
- Belfry Investment & Securities Limited
- Bestworth Assets & Trust Limited
- Calyx Securities Limited
- Afrinvest Securities Limited
- Anchoria Investment & Securities Limited
- Apel Asset Limited
- APT Securities & Funds Limited
- City Code Trust & Invest Company Limited
- Compass Investments & Securities Limited
- Cordros Securities Limited
- FIS Securities Limited
- Foresight Securities & Investment Limited
- Forte Financial Limited
- Forthright Securities & Investments Limited
- Fortress Capital Limited
- Core Securities Limited
- Coronation Securities Limited
- Camry Securities Limited
- Capital Assets Limited
- Centre Point Investment Limited
- Century Securities Limited
- Chapel Hill Denham Securities Limited
- Chartwell Securities Limited
- Citi Investment Capital Limited
- Cowry Securities Limited
- Crossworld Securities Limited
- Crown Capital Limited
- CSL Stockbrokers Limited
- Deep Trust & Investment Limited
- De-Lords Securities Limited
- Dominion Trust Limited
- DSU Brokerage Services Limited
- Dunbell Securities Limited
- Dunn Loren Merrifield Securities Limited
- Dynamic Portfolio Limited
- EDC Securities Limited
- Edgefield Capital Management Limited
- EFG Hermes Nigeria Limited
- El-Elyon Alliance and Securities Limited
- Elixir Securities Limited
- Enterprise Stockbrokers Limited
- Equity Capital Solutions Limited
- Capital Bancorp Plc
- Capital Express Securities Limited
- Eurocomm Securities Limited
- Express Portfolio Services Limited
- Falcon Securities Limited
- FBC Trust & Securities Limited
- FBNQuest Securities Limited
- FCSL Asset Management Company Limited
- Fidelity Finance Company Limited
- Capital Trust Brokers Limited
- CardinalStone Securities Limited
- Cashcraft Securities Limited
- Cashville Investments & Securities Limited
- CDL Capital Markets Limited
- Financial Trust Company Nigeria Limited
- Finmal Securities Limited
- First Integrated Capital Management Limited
- FSDH Securities Limited
- FSL Securities Limited
- Funds Matrix & Asset Management Limited
- Fundvine Capital & Securities Limited
- Futureview Securities Limited
- Gem Assets Management Limited
- Gidauniya Invest & Sec Limited
- Global Asset Management (Nig) Limited
- Globalview Capital Limited
- Golden Securities Limited
- Greenwich Securities Limited
- Growth & Development Asset Management Limited
- Gruene Capital Limited
- GTI Securities Limited
- Harmony Investment & Securities Limited
- Heartbeat Investments Limited
- Hedge Securities & Investment Limited
- Heritage Capital Markets Limited
- ICMG Securities Limited
- Icon Stockbrokers Limited
- Imperial Assets Managers Limited
- Integrated Trust & Investments Limited
- Interstate Securities Limited
- Investment One Stockbrokers Int’l Limited
- Investors & Trust Company Limited
- Kapital Care Trust & Securities Limited
- Kedari Capital Limited
- Kinley Securities Limited
- Kofana Securities & Investment Limited
- Lambeth Capital Limited
- Lead Securities & Investment Limited
- Lighthouse Asset Management Limited
- Magnartis Finance & Investment Limited
- Mainstreet Bank Securities Limited
- Maxifund Investment & Securities Plc
- MBC Securities Limited
- Mega Equities Limited
- Meristem Stockbrokers Limited
- Midas Stockbrokers Limited
- Mission Securities Limited
- Molten Trust Limited
- Morgan Capital Securities Limited
- Mountain Investment & Securities Limited
- Network Capital Limited
- Networth Securities & Finance Limited
- Newdevco Investment & Securities Limited
- Nigerian International Securities Limited
- Nigerian Stockbrokers Limited
- Nova Finance & Securities Limited
- Osborne Capital Markets Limited
- PAC Securities Limited
- Peace Capital Markets Limited
- Pilot Securities Limited
- Pinefields Investment Services Limited
- PIPC Securities Limited
- Pivot Capital Limited
- Planet Capital Limited
- Portfolio Advisers Limited
- Premium Capital and Stockbrokers Limited
- Primewealth Capital Limited
- Prominent Securities Limited
- PSI Securities Limited
- Pyramid Securities Limited
- Qualinvest Capital Limited
- Quantum Zenith Securities & Investments Limited
- Rainbow Securities Limited
- Readings Investment Limited
- Regency Assets Management Limited
- Rencap Securities (Nig) Limited
- Resort Securities Limited
- Reward Investment & Service Limited
- RMB Nigeria Stockbrokers Limited
- Tower Securities & Investment Company Limited
- Trade link Securities Limited
- Traders Trust & Investment Company Limited
- Transworld Investment & Securities Limited
- Zion Stockbrokers & Securities Limited
- Trustbanc Capital Management Limited
- Rostrum Investment & Securities Limited
- Rowet Capital Management Limited
- Royal Crest Finance Limited
- Royal Guaranty & Trust Limited
- Sankore Securities Limited
- Santrust Securities Limited
- Securities & Capital Management Company Limited
- Securities Africa Financial Limited
- Security Swaps Limited
- Shalom Investment & Securities Limited
- Shelong Investment Limited
- Sigma Securities Limited
- Signet Investment & Securities Limited
- Skyview Capital Limited
- Smadac Securities Limited
- Solid Rock Securities & Investment Plc
- Spring Board Trust & Investment Limited
- Spring Trust & Securities Limited
- Stanbic IBTC Stockbrokers Limited
- Standard Union Securities Limited
How can I login to my CSCS account?
Answer: Head straight to cscs account login here
How do I update my CSCS account personal details?
Answer: To updated your CSCS account, you need to write a letter and address it to
The Managing Director,
CSCS PLC through your Stockbroker.
You need to pass through your stockbroker for security reasons.
What do I need for CSCS biometric capture system
Please present any of the following valid means of identification;
- National ID Card,
- International Passport,
- Driver’s License,
- Voter’s Card
We will need the following information
- Your contact detail
- Your CHN (Clearing House Number)
- Name of Stock broker
- Investors BVN.
- Investor’s Bank account number.
How can I claim my dividends?
You would need to contact the registrar managing the shares of the company you hold.
How Much Does it Cost to Open A CSCS Account?
Opening a CSCS account is generally free of charge but your stockbroker may charge you a little amount to cover the administrative cost.
Some stockbroking firms may also want you to deposit a certain minimum amount for trading as a requirement for creating accounts for you.
You can also demand to open a Special Account.
Final thought:
If you already bought shares and the company has been acquired by another company, talk to your stockbroker on how to claim your dividends.
Do you want to track your shares in Nigeria? Follow the steps above or head straight to CSCS online registration portal to read more about this, alternatively, you can drop your question below.
