The Central Securities Clearing System Plc (CSCS) plays a crucial role in the Nigerian financial market. It acts as the central infrastructure responsible for the depository, clearing, settlement, delivery, and reporting of all securities transactions within the Nigerian capital market.
Establishment and Core Objectives
The Central Securities Clearing System (CSCS) Plc was incorporated on July 29, 1992, as a Private Limited Liability Company. It commenced operations on April 14, 1997. CSCS’ core business objectives center on being the Depository, Clearing and Settlement Company for listed and traded securities in the Nigerian Capital Market.
CSCS provides an effective single access point for all post-trade services in the Nigerian financial market, covering all forms of capital and money market securities including: equities, treasury bills, bonds, commodities, funds and cash.
As the country’s premier Financial Market Infrastructure (FMI), CSCS processes securities in electronic book-entry form, ensuring safe and efficient transaction processing within the ecosystem whilst also pioneering innovative solutions to deepen and enhance the efficient functioning of the market.
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Functions and Services
CSCS performs clearing and settlement functions for admitted securities traded on the NASD OTC market. Clearing and settlement is “Delivery versus Payment”. CSCS provides a safe and cost effective solution for depository services and holds the admitted securities in a dematerialized form.
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CSCS is Nigeria’s annotation agent and shall when required, issue International Securities Identification Numbers (ISINs) to admitted securities on the NASD OTC Securities Exchange.
Here is a summary of settlement cycles for different asset classes:
| Class | Settlement Cycle |
|---|---|
| Equity | T+3 |
| Bond | T+2 |
Technological Advancements and Innovation
For more than two decades, CSCS has continuously partnered with other stakeholders in redefining the structure and operations of the Nigerian Capital Market, leveraging new technologies in extracting efficiencies across the transaction life cycle while providing assurance in post-trade execution.
With the support of the Securities and Exchange Commission (SEC), other financial market regulators and collaboration with market participants, CSCS actualized the full dematerialization of share certificates in the Nigerian equity market, thus facilitating the full transition of the Nigerian equity market to the automated trading system.
In 2018, CSCS began re-evaluating its operational strategy and recognised the need for an infrastructure overhaul. The bottom line? “Three core tenets were foundational to our evaluation criteria: service, stability, and scalability. Following a thorough analysis of potential partners, one name emerged as a clear front-runner: Nutanix.
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Partnership with Nutanix
Transitioning to a new infrastructure, especially one as extensive as CSCS's, is no small feat. Its legacy system was a behemoth, with an intricate web of over 70 physical servers. The primary challenge? To retain only the core server and transpose functionalities from the others to a more modern, hyperconverged infrastructure.
Beyond the operational challenges, data security was a towering concern. "In our blueprint for technological metamorphosis, Nutanix was at the core. With their invaluable expertise, we streamlined our sprawling infrastructure to about 50 optimised servers.
“To put it succinctly, Nutanix now hosts our most vital components: our core database, crucial data sets, pivotal applications, and essential APIs. We have moved 90% of our systems across to the Nutanix clusters.
According to CSCS, something that sets Nutanix apart is the calibre of its support system. With its acquisition of the Nutanix Ultimate License, it has access to premium support services.
Benefits of Nutanix Implementation
“Incorporating Nutanix into our operations has brought transformative benefits to our company. Firstly, the financial advantages have been immediately clear, with savings of approximately $450,000. This financial clarity extends to budget predictability. Unlike the uncertainties tied to traditional systems, Nutanix's platform provides scalability and transparency, allowing CSCS and its partners to develop and scale new digital products and solutions rapidly.
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“Our agility has positioned us as a strategic player in the capital markets. We're not merely providers but innovators. Our ability to promptly roll out servers, replicate workloads, and introduce changes has accelerated our go-to-market strategies.
“Nutanix is a central pillar in our strategies as we envision our future. Currently, an overwhelming 90% of our infrastructure is anchored on Nutanix. Our commitment to the platform will grow as we want to deploy a scaled-down version specifically for testing purposes. CSCS is also looking to expand its hybrid cloud capabilities and is negotiating with cloud providers.
“Our roadmap with Nutanix stretches out for five to seven years.
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