FREQUENTLY ASKED QUESTIONS
How do I become a shareholder?
What is the difference between the primary and secondary capital markets?
What is CSCS?
What do I gain from buying shares of quoted companies?
How do I determine what shares to buy?
How do I sell my quoted shares?
What is "verification and lodgement" of shares certificates about?
How do I verify and lodge my shares certificates in the CSCS?
What is the evidence that shares have been purchased for me?
Apart from buying and selling of shares, what other services do stock
broking firms provide?
How is my investment protected?
What do I need to open a CSCS account through Intersec Ltd?
How do I become a shareholder?
You can become a shareholder by buying the share of a company either through the primary market or secondary market.Back to top
What is the difference between the primary and secondary capital markets?
The primary market provides the infrastructure and processes for the purchase of newly issued shares of a quoted company usually through initial public offer (IPO), subsequent offers for subscription, and rights issues.The secondary market provides the infrastructure and processes for the purchase and sales of already existing shares of quoted companies through your stockbrokers on the trading floor of a Stock Exchange.
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what is cscs?
CSCS refers to the Central Securities Clearing System Ltd. It was commissioned on April 8, 1997 as a subsidiary of the Nigeria Stock Exchange. It facilitates the clearing and settlement of trades and provides custodial services. The CSCS provides statements of shareholding indicating all shares held by investors in the secondary market.Back to top
What do I gain from buying shares of quoted companies?
a. You become a part owner (shareholder) in the company which enables you to attend its general meetings and to vote thereon.b. It qualifies you to earn dividend income declared by the company.
c. It enhances growth of your investment in form of bonus ( free shares without payments)
d. Capital appreciation which provides an opportunity to sell higher than purchase price.
e. Liquidity- Provides fund to meet obligations as at when required and the opportunity to sell part of the investment.
f. The shares can be used as collateral for loan.
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How do I determine what shares to buy?
This depends on your investment objectives. It is good to discuss your investment objectives with your Stockbrokers or Wealth/Asset Managers.Back to top
How do I sell my quoted shares?
By issuing to your stockbroker signed written and specific sales mandate if shares are already in the CSCS. However, if the share were bought through the Primary market and still in certificate form, you need to verify and lodge the shares in the CSCS before selling.Back to top
What is “verification and lodgment” of shares certificates about?
This is the process by which shares in certificate form are reduced (dematerialized) to electronic records in the CSCS. The Company Registrars will verify your signature on a share transfer form to ascertain ownership and then transfer same to the CSCS to update your records while the certificate is withdrawn.Back to top
How do I verify and lodge my share certificates in the CSCS?
Download and complete the share transfer forms (sign under transferor only). Send completed signed forms together with share certificates to your stockbrokers who will in turn forward to the respective registrars for verification and lodgment in the CSCS.Back to top
What is the evidence that shares have been purchased for me?
Share certificate will be issued in your name if you are buying from the primary market while your CSCS accounts (with your stockbroker) will be updated electronically after three (T+3) days, if buying through the secondary market.Back to top
Apart from buying and selling of stocks, what other services do stock broking firms provide?
Management of investment portfolio, investment advisory services, verification and lodgment of shares in the CSCS, transmission and endorsement of deceased estate shares, retrieval of dividend warrants and shares certificates.Back to top
How is my investment protected?
The market is regulated by the Nigerian Stock Exchange & Securities and Exchange Commission. It is further made transparent by the activities of the Central Securities Clearing System which is a subsidiary of the Nigerian Stock Exchange that provides online view of your statements of shareholding in various equities. There is an Investor Protection Fund under the management of the Nigerian Stock Exchange which seek to protect shareholders from incidence of unauthorized sales and other related abuses. The "Trade Alert" is also an sms facilitated notification of dealings on your CSCS accounts to which you can subscribe through your stockbrokers.Back to top
What do I need to open a CSCS account through Intercontinental securities Limited?
a. Execute personal or corporate account opening documents with Intersec to fulfill KYC (Know Your Customer) rules of the SEC and NSE.b. Two passport photographs.
c. Copy of utility bill
d. Copy of means of Identification (Driver’s license or International passport).
Additional requirements if corporate:
a. Certificate of incorporation
b. List of authorized signatories
c. Memorandum and Articles of Association
d. Board resolution to open stock broking/ CSCS accounts.
e. Form CAC 7. (Particulars of Directors) and CAC 2 (Returns on allotment of shares to subscribers).
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