The Securities and Exchange Commission (SEC) has said that direct cash payment of net proceeds of stock market transactions would commence on January 4, 2016.
A reliable source close to the commission said in Lagos that the January 4 take off date of the new policy was sacrosanct.
Direct cash settlement is the payment of net proceeds of transactions straight into investors’ accounts, as against the current general practice where payments for investors’ transactions go into brokers accounts, for onward disbursement to their clients.
The source said that the commission had concluded arrangements to ensure commencement of the policy aimed at eliminating fraud in the market.
According to the source, all issues surrounding the policy will be resolved as the market moves on with it.
The source said that the commission would continue to engage all stakeholders to reduce hitches that would affect the implementation of the policy.
The source added that direct cash settlement would prevent the illegal sale of investors’ stocks and ensure prompt payment.
He said that brokers had been mandated in line with the framework to provide their clients’ bank account details to the Central Securities Clearing System (CSCS), for a smooth take off of the policy.
The source added that settlement of each trade carried out on the Nigerian Stock Exchange (NSE’s) Automated Trading System would be done by direct payment into the client’s account, as provided to the CSCS.
However, most operators were of the view that the kick-off date was not feasible due to some hitches that had yet to be addressed by the NSE and SEC. (NAN)
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