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The main thrust of this study is to examined the relevant of theoretical and empirical studies which would provide an analytical framework for the study of the Nigerian stock exchange central security clearing system, problems & prospects. Where is a general death of materials for analyzing capital markets especially in the performance capital market in Nigeria. Meanwhile, the Nigerian stock exchange is statutory empower to organized, operate direct control and coordinate the various public stock exchange that exists in the country to check and validate deals done on a daily basis provides the floor for trading on capital markets. It is also an attempts for the study to dwell on the problems and prospects that led to the emerging of the central securities clearing system (CSCS) in terms of structure and growth of the Nigeria capital market, it evaluate against the capital market indicators and the central securities clearing system. In conclusion, the paper after appropriate capital market, to ensure that stock exchange central securities clearing system, problems and prospects gain its bases.




To Fama, (2006: 139) The Nigerian Stock Exchange is statutory empower to organized operate, direct, control and coordinate the various public stock exchange that exists in the country, to check and validate deals done on a daily bases, provides the floor for trading on capital markets securities and also with establishment of its subsidiary Central Security Clearing System (CSCS), transmit to CSCS online-real time basis through automated trading system (ATM) on transaction that occurs on the floor of the exchange.

What is known as Nigerian stock exchange today was formerly the Lagos Stock Exchange and it was established in 1960. In December, 1977, It became the Nigerian Stock Exchange which branches established in some major commercial cities of the country. At present thee are six branches of the Nigerian Stock Exchange. Each branches has its own trading floor. The branch in Lagos was open in 1961: Kadun, 1978, Port-Harcourt: 1980, Kano: 1981, Onisha: February 1990 and Ibadan: August 1990, Abuja: October, 1999 and Yola: April, 2002.

Lagos is the head office of the exchange, The Exchange started of the exchange, the exchange started operation in 1961 with 19 securities listed for trading. Today, there 262 securities listed in the exchange made up of 11 government stocks 49 Industrial loan (debentures/preference) stock and 194 equity) ordinary shares of the company, all with a total market capitalization of appropriately N287.0 billion as at August 31, 1999.

The Nigerian stock exchange is a market for long term loans.

The operations of the Nigerian stock exchange are the Jobbers and brokers who buy and sell securities on behalf of the investors for a free (commission), called Brokerage fees (Unugbro 2007:201) in effort to continue to enhance on it’s image services and quality of services delivery the management of the Nigerian Stock Exchange (NSE) under took a critical review of the operations and he efficiency of the stock market operators to the general public and cap[ital market in Nigeria .

In 1989, the Federation of International Stock Exchange is a member endorsed the recommendation of the group of thirty (G.30) the private sector which studied global financial markets. One of the aims of the study is to enhance the efficiency and effectiveness of the clearing and settlement system, which are essentially to sustained growth of capital market.

The issuing house or investment banks are also operators as members of the Nigerian Stock Exchange, because they help companies or government to sell the shares they offer to the jobbers who in turn sell the shares to the brokers who deals directly with the general public.

Although the exchange an independents organization controlled by the stock exchange board, it’s growth has often been encouraged by the central bank by given subventions and by acting as buyers of the last resort of any government stock, not absorbed by the capital market.

There were admittedly bottlenecks that adversely affected all capital market operations. In Nigeria most especially, there was the difficulty associated with the transfer of shares and production of new certificates for traded securities and this is usually took several months to conclude also the processing of transaction done on the floor  of the Nigeria stock exchange was done manually which had continued to create delays in deliveries.

In order to prevent these bottlenecks, the Nigeria stock exchange in corporated a subsidiary company known as the central securities clearing system (CSCS) Ltd to implement a computerized Stock Exchange Management System (SEMS). The emphasis of this initial two was the dematerialization of shares certificates in a central depository and the elimination of unnecessary difficulty between registrar and the company’s executives in issuing new certificates to investors.

The Central Securities Clearing System (CSCS) was in corporated as a subsidiary company (NSE) which was commissioned on April 8, 1997 and commenced operations on April 14, 1997.

  • The Central Securities Clearing System provides central depository for all shares certificates of quoted securities including new issues.
  • Securities not quoted on the Nigerian stock exchange can be deposited with CSCS Ltd for safe keeping as well as certificate for foreign investors. Stanbic Nominee Bank LTD association with standard bank.
  • The clearing and settlement of stock market transaction.
  • The issuance of clearing house numbers and account numbers to stock broker and investors.
  • Sub-registry for all quoted securities in conjunction with registrars of the quoted companies shareholders can always ascertain the held electronically in a particular securities by requesting for a statement from the CSCS Ltd through stock broking.

A statement of a problem is very vital in any researcher work in that is serve to elaborate upon the information in the little of the study and they are as follow:

  1. Does the central securities clearing system increase the influx of foreign investors into the Nigerian economy?
  2. Has CSCS contributed to eradication of fraudulent transactions in the Nigeria stock exchange
  3. Has CSCS contributed to the growth of capital market in Nigeria?




In general, the research work is intended to achieve the following objectives.

  1. To create awareness among the investing public on the activities of the central securities clearing stock exchange.
  2. To examine whether listed on the Nigeria stock exchange.
  3. To ascertain whether central securities clearing system has been encouraging the influx of foreign investor into the Nigerian economy.
  4. To evaluate its functions in relation to the clearing custodian agency for local and foreign investment.
  5. To evaluated the potential of CSCS in protecting investment in the Nigeria stock exchange.



  1. The establishment of CSCS as a subsidiary to the Nigerian stock exchange has not increased in influx of foreign investors into Nigeria
  2. The establishment of CSCS has not facilitated transaction in the Nigerian stock exchange.
  3. The investing public is not aware of the functions of CSCS.

The findings from the study of the Nigerian stock exchange central securities clearing system, problems and prospect would reveal a lot of importance to the capital market, the Nigerian capital market at large.

The study is aimed at providing valuable assistance to any individual, groups, bodies and corporations who are interested in the capital market.

Apart from the above set of people mentioned the study is expected to be interest to the following;

  1. All key players/operators in the Nigerian stock exchange, that is brokers/jobbers, speculators, registrars, issuing houses, individuals and institutions, investors, merchant banks and other forms of fibers at network of the Nigerian capital market.
  2. The Nigerian stock exchange and it’s subsidiary company: CSCS Ltd, the study also seeks to enlighten the investing public on the benefit that will be accrued to them as an investors in the Nigerian capital market.

A research topic, no doubt is a wide embracing one, but due to the limited time and, resources, it was impossible to cover all the relevant area related to this study.

Admittedly, the population from which samples were drawn is not a true representation of the capital market in Nigeria. Hence, the extent to which generalization could be made for this study is of necessity limited.

However, despite all the aforementioned  factors, one cannot underestimate the principal budgeting factor which is finance. Finance on it’s own was a major constraint to this research work as this research needs a huge financial commitment.

The projects which particularly probe the Nigerian Stock Exchange central securities system: problems and prospects has a scope to which it can operate. The research work is designed to evaluate the problems and prospects of the Nigerian stock exchanges securities clearing system between the years. The effect it has on the Nigerian economy, the positive changes it has on the Nigerian capital market of the nation, the benefit made available to prospective investors in the Nigerian stock exchange.