What is CSCS All About?

CSCS means Central Securities Clearing System Plc. 

It is a financial market infrastructure (FMI), a public liability company, licensed to carry on the depository, clearing and settlement of all transactions in the Nigerian Capital Market.

The CSCS is the primary depository, clearing, and settlement system for the Nigerian capital market. It was established in 1997 to provide efficient and transparent handling of securities transactions.

The CSCS ensures that when you buy or sell shares, your transactions are properly recorded, settled, and secured for ever.

So, if you’re looking to build wealth through the Nigerian stock market, having a CSCS account is your first step.

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What is a CSCS Account?

A CSCS account is your passport to wealth creation in the Nigerian capital market.

In the world of equity investing in Nigeria, a CSCS account is an essential tool for trading and holding securities.

Just like a bank account number links you to your bank, a CSCS account number connects you to a specific stockbroker (brokerage firm).

It acts as a digital vault for your investments, ensuring that your stocks, bonds, and other securities are safely stored and easily accessible.

Whether you are a beginner or a seasoned investor, having a CSCS account ensures that your investments are safe, easily accessible, and efficiently managed.

How Do You Get a CSCS Account Number?

Whenever you open a stockbroking account with a stockbroker, what you are doing in essence is opening a CSCS account. So, you will receive your CSCS account number in the process.

 

How to Set Up a Brokerage Account

Follow the following steps to get started opening a stockbroking (or CSCS account):

(a.) Select a Suitable Broker:

Begin by researching and selecting a broker that aligns with your investment goals. There are various options available, including traditional brokers and fintech apps.

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(b.) Complete the Account Opening Form:

It is FREE to open a CSCS account. Once you’ve chosen a broker, you’ll need to fill out the account opening form. While there are fintech apps today for buying stocks, I recommend the traditional brokers, especially for beginners.

(c.) Gather the Necessary Documents:

When opening a brokerage account, you’ll typically need to provide certain
documents for verification purposes.

These documents commonly include:

i. Valid government-issued identification (e.g., passport, driver’s license, NIN, or permanent voter’s card).

ii. A utility bill displaying your current address (which should match the address provided on the account opening form).

iii. Passport photograph

iv. Biometric Verification Number (BVN)

v. Signature specimen (sign o a piece of paper and take a picture of it).

Additional documents may be required depending on the specific requirements of your chosen stockbroker.

v. If you are based abroad and use a foreign address, you need to have your documents notarized before you submit them.

 

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You will receive your CSCS number and a CHN in the email. These numbers are your unique identifiers in the market and serve as a personal vault for all your investments.

What is Clearing House Number (CHN)?

A CHN is a unique identity for investors within the CSCS system.

You can have multiple CSCS numbers with different stockbrokers, but only one CHN.

However, regardless of the number of stockbrokers you have, all your assets purchased through them will be stored securely under your CSCS number(s), accessible from one central location, the CSCS portal.

Note again that, when investing in stocks, your assets are held by the CSCS, not the stockbroker. This ensures the protection of your assets and easy access
to your investments, consolidating them for convenience and effective portfolio management.

How Does CSCS Secure Your Investments and Assets?

CSCS maintains a digital record of securities within its depository. This digital system ensures the safe-keeping and efficient transfer of securities between investors during trading transactions.

Summary:

CHN’s are alpha-numeric, while CSCS Numbers are made up of just numbers.