CSCS cuts fees to drive retail investment, market liquidity

Central Securities Clearing System Plc (CSCS) has announced sweeping reductions and outright removal of selected fees, in a move aimed at lowering the cost of investing and easing transaction barriers across Nigeria’s capital market.

Under the revised pricing framework announced on Tuesday, CSCS cut lien fees for retail investors by 50 percent, from 0.25 percent to 0.125 percent, while nominal transfer fees for qualifying transfers between immediate family members have been completely scrapped.

The market infrastructure operator also removed broker code creation and renewal fees as well as eligibility fees payable by brokers across the exchanges serviced by CSCS.

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The fee review comes as the Nigerian capital market seeks to deepen retail participation, improve liquidity and make market access more affordable for investors and intermediaries.

Commenting on the development, the Managing Director/Chief Executive Officer of CSCS, Shehu Yahaya Shantali, said the company was responding to the evolving needs of investors and market participants by reducing areas of friction in the investment process.

“As Nigeria’s capital market continues to grow and evolve, we believe its infrastructure must continually respond to the needs of investors and market participants,” Shantali said.

According to him, the review is designed to improve accessibility and support greater participation while maintaining the security, resilience and efficiency of the infrastructure underpinning the market.

He added that CSCS would continue to invest in technology and capabilities while working with stakeholders to ensure that the post-trade infrastructure remains responsive to market needs.

The reductions are expected to particularly benefit retail investors and market intermediaries by lowering transaction-related costs and creating greater room for brokers, fintech companies and other market participants to develop products aimed at expanding investor access.

The removal of the family-transfer charge could also make the transfer of eligible securities within immediate families significantly cheaper, potentially supporting greater intergenerational ownership and transfer of investments.

For brokers, the scrapping of code creation and renewal charges, alongside eligibility fees across CSCS-serviced exchanges, reduces some of the operational costs associated with market participation.

CSCS said the revised pricing forms part of its broader strategy to enhance investor experience, encourage retail participation, promote innovation and contribute to the development of a deeper and more inclusive capital market.

The company, which serves as Nigeria’s central securities depository and provides clearing and settlement infrastructure, has played a key role in the market’s transition to electronic and dematerialised securities.

Its services cover equities, commercial papers, corporate bonds, sub-national bonds, selected sovereign bonds, exchange-traded funds, real estate investment trusts, mutual funds and commodities.

The latest intervention comes against the backdrop of ongoing efforts by market regulators and infrastructure providers to reduce barriers to investment and improve the efficiency of Nigeria’s capital market.

CSCS said it would continue to work with regulators, exchanges, market operators and other stakeholders to identify further opportunities to improve market efficiency and strengthen the infrastructure supporting sustainable growth.