By Babajide Komolafe

Another organisation you need to know for profitable investment in shares is Central Securities Clearing System (CSCS). Just as you cannot do without the services of a stockbroker and a registrar, you cannot do without the services of CSCS, except you do not want to sell your shares, or buy from existing shareholders.

There are basically two ways to keep your money. You either keep it in cash, in your pocket or wherever, or you keep it with a bank. In the case of the later, the bank opens account for you and you can obtain bank statement to ascertain how much you have. Similarly, you either keep your shares in certificates, or you take them to the CSCS (through your broker). CSCS opens an account in your name and, gives you a number (CSCS number).

And if you choose to sell or buy, CSCS transfers shares from the seller’s account to the buyer’s account. Thus, instead of share certificates, you can always obtain statement of your shares account from the CSCS anytime you need it, either to ascertain number of shares, or to use as evidence of your share investment.

Thus, the CSCS is a bank for shares and other investment instruments traded on the stock exchange. Not keeping your shares with the CSCS or in a CSCS account is as risky as not keeping your money in a bank. Share certificates like cash, can be lost, stolen or damaged.

In addition to this, you can’t buy and sell shares on the stock exchange without a CSCS account. That is why you can’t make profitable investment in shares without knowing about the CSCS. The company’s website (cscsnigeriaplc.com) offers a lot of essential information to investors. But the CSCS also reflects the widespread inefficiency and poor customer service in the stock market.

A good example is the unnecessary bureaucratic process investors go through to obtain CSCS statement. You first go to the 12th floor of the stock exchange building, where statement issuance unit is located, to obtain and fill a form bearing the account number of the company. Next you go to the First Bank Branch at the ground floor to pay for the statement.

It’s just N200 per statement. After that, you go back to the 12th floor to submit the form, and then come back the next day to collect the statement. Take note that the company has one location, which is the stock exchange building. The implication is that investors across the country need to travel down to Lagos if they need a CSCS statement on the company’s letterhead.

The question is why should a company performing such critical service like CSCS have one location? And why must investors suffer so much, just to pay N200, to obtain statement of account? Investors have complained about this unnecessary bureaucracy, but because the company enjoys monopoly and seems not to be regulated, it has continued to take investors for granted.