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Investor FAQs
Q: What is a Stock Exchange?
A: A Stock Exchange provides a market, which facilitates the buying, and selling of securities like shares of quoted companies, bonds, options, futures and other tradable instruments.

Q: What is Securities and Exchange Commission (SEC)?
A: SEC is the apex regulatory institution of the Nigerian Capital Market with the basic objectives of investors protection and capital market development towards enhanced socio-economic growth and development.

Q: What is the CSCS?
A: CSCS is an acronym for Central Securities Clearing System Limited. It is a limited liability company which was incorporated by the Corporate Affairs Commission. It was licensed by the Securities and Exchange Commission as an Agent for Central Depository, Clearing and Settlement of transactions in the stock market.
It operates a computerized depository, clearing settlement and delivery system for transactions in shares listed on The Nigerian Stock Exchange.
CSCS facilitates the delivery (transfer of shares from seller to buyer) and settlement (payment of bought shares) of securities transacted on the floors of The Nigerian Stock Exchange. It enables stocks to be processed in an electronic book-entry form thereby substantially reducing the period it takes a transaction to commence and end.

Q: What is the Primary Market?
A: The primary market is that part of the capital markets that deals with the issuance of new securities. Companies, governments or public sector institutions can obtain funding through the sale of a new stock or bond issue. The primary markets are where investors can get new securities issuance. The issuing company or group receives cash proceeds from the sale, which is then used to fund operations or expand the businesses by the Company.

Q: What is the Secondary Market?
A: The secondary market is the financial market where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold. Example in Nigeria is the Nigerian Stock Exchange. This is the market for trading (buying/selling) of securities already listed on an Exchange.

Q: What are the procedures for investing in shares?
A: To invest in shares you have to open an account with a stockbroking firm, where you will be guided rightly.

Q: How do I open an account with Capital Bancorp Plc (CBP)?
A:
• Complete and sign account opening forms
• Provide Know Your Customer (KYC) documentation i.e. passport photograph, means of identification, utility bill
• N100, 000.00 or its equivalent in stock.
(NB: Please see Account opening requirements under Resources on the Website for comprehensive list)

Q: What do I stand to benefit from opening an account with CBL?
A: Opening an account with CBL comes with lots of benefits. You will have the privilege of having your account managed by the professionals in the Industry; you will enjoy the premium and excellent services we are known for; you will enjoy quality research information regularly; the benefits are endless actually!

Q: What is dematerialization?
A: This is a process in which physical share certificates obtained through public offers are converted after verification by the listed companies Registrar’s into an electronic record kept by the CSCS. Without dematerialization, such shares cannot be sold on the Nigerian Stock Exchange.

Q: How do I deposit my certificates and what happens after?
A: You can only get your share certificates verified through a Stockbroking firm. You have to take your certificates to a Stockbroking firm where you will fill in/sign forms including the Transfer Form and the Know Your Customer (KYC) Form. The Stockbroking firm will take the certificate(s) to the Registrar, who will verify them and then send information to the CSCS about the verification. The CSCS will complete the transaction and credit your CSCS Account accordingly.

Q: How long does it take to verify a certificate?
A: Once all documents required for verification are provided, your certificates could be verified within two weeks of submission with your Stockbroker. Certificates may sometimes take longer to verify in case of any irregularity in signature, this could further extend the duration of the verification process as the shareholders’ attention may be required or be asked to produce bankers’ confirmation of signature.

Q: Why do I need Banker’s Confirmation?
A: Banker’s Confirmation is needed when the Registrar cannot verify a client’s signature on the Transfer Form sent to them with the sample they have stored in their database. Banker’s Confirmation will also be needed if the Registrar does not have a sample signature for the client.
With a Banker’s Confirmation, your bank is confirming to the Registrar that they know you and that you have an active account with them. They are also confirming to the Registrar that the sample signature you have signed on the Banker’s Confirmation is indeed your true signature. In essence, it is a way of protecting your investment.

Q: Why do I need to write to the Registrars for my missing certificates and not CBL?
A: When making any request to the Registrars for missing certificates, you are doing it through CBL and your letter should be addressed to the Registrar directly, but submitted to CBL for processing. CBL will then write a cover letter and take the documents to the Registrars on your behalf. CBL will follow up with the Registrars and update you with the outcome as soon as we have feedback.

Q: Who is a Registrar?
A: A Registrar keeps records like names, addresses, signatures and total holdings of shareholders of a particular company.

Q: How long does it take to sell my shares and collect my cheque?
A: Depending on the liquidity of the stocks, you should get your cheque on the third day (T+3) after sales of such shares have been confirmed.
Client must have a current account in which proceeds of their shares would be deposited.

Q: What is T+3?
A: T+3 simply means trading day plus three additional days. It is the number of days it takes trade to settle. For clients to get their cheque after sales of stocks it takes extra 3 days plus the trading day.

Q: What are the charges on purchases and sales of stocks?
A:
Cost relating to ‘BUY’ Transactions:
CSCS Fee0.06% of Consideration
VAT on CSCS0.003% (5% of CSCS Fee )
Stamp Duties0.075% of Consideration
SEC Fee0.3% of Consideration
Brokerage Commission1.35% of Consideration
VAT on Brokerage0.0675% (5% of Brokerage Commission)
TOTAL1.8555%

Cost relating to ‘SELL’ Transactions:
CSCS Fee0.36% of Consideration
VAT on CSCS0.018% (5% of CSCS Fee)
Stamp Duties0.075% of Consideration
NSE Fee0.3% of Consideration
VAT on NSE0.02% (5% of NSE Fee)
Brokerage Commission1.35% of Consideration
VAT on Brokerage0.0675% (5% of Brokerage Commission)
TOTAL2.1855%

Q: Are the charges negotiable?
A: It is only the broker’s commission that is negotiable and this largely depends on the volume and frequency of trade.

Q: How do I get answers to other questions?
A: Please send a comprehensive mail with your full names to [email protected] or [email protected].
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