Qn. WHO ARE THE KEY PLAYERS IN THE CAPITAL MARKET AND WHAT ARE THEIR FUNCTIONS

Ans: The Nigerian Capital market is a network of financial institutions that interact to mobile and efficiently allocate savings into the productive sectors of the economy for overall growth and development. The capital market is an arrangement of participants, institutions, rule and instruments that facilitate the mobilization and transfer of long tenured funds in the economy.

The key players in the market can be classified into two: Regulators and Operators. The regulators are Securities and Exchange Commission (SEC), the Nigeria Stock Exchange (NSE) and the Institute of Capital Market Registrars (ICMR).

The operators include the Issuing Houses, Registrars, Brokers/Dealers, Investment Manager/Portfolio Adviser, Lawyers and Accountants.

Qn. WHAT IS THE PRIMARY AND SECONDARY MARKET

Ans. The Primary Market is the market for purchase and sales of new or fresh securities. Here the issue of proceeds got to the issuer or the deficit unit wh9ich is expected to make use of the funds.

The secondary market on the other hand exists for the trading of already issued securities. It is often likened to a market for second-hand goods. But unlike the latter values are less than the brand new, all shares sold or purchased in secondary market rank pari-passu with those issued in the primary market.

The secondary market is said to impart liquidity to the capital market thereby serving as encouragement to investors to deal in the primary market.

Qn. WHAT ARE THE FUNCTIONS OF THE NIGERIAN STOCK EXCHANGE

Ans. The Nigerian Stock Exchange is the organized primary and secondary securities market in Nigeria. It was set up in 1960 as Lagos Stock exchange and in 1977 the name was changed to Nigerian Stock exchange.

It is the arrangement whereby large ad small investors alike buy and sell (shares and bonds) through stockbrokers, securities of companies and government agencies.

Qn. WHAT ARE THE ROLES OF THE CENTRAL SECURITIES AND CLEARING SYSTEM (CSCS)

Ans. The Central Securities and Clearing System (CSCS) is a private company with shareholders who do not run the company themselves. It is the Central Securities Depository (CSD) of domestic and foreign investors in the Nigerian Capital Market.

The CSCS emphasizes the dematerialization of certificates - depository and electronic transfer of stocks/securities which is recognized by the apex regulatory authority – SEC Degree 45 of the 1999 Constitution of the Federal Republic of Nigeria..

The CSCS has made great impact in the Nigerian Stock Market in these areas:

• Central Depository for all share certificates of quoted securities including new issues on the Nigerian Stock Exchange.
• Clearing and settlement of Nigerian Stock Market transactions
• Safe keeping and custodian services
• Established digital data storage and retrieval centre
• Clearing and settlement of Secondary Market/OTC Transactions of FGN Bonds and Treasury Bills.

Qn. WHAT IS CHN

Ans. CHN represents Clearing House Number assigned to every shareholder at the first point of entry into CSCS system by completing CSCS Form R005 (shareholders particulars)

Qn. WHAT IS SHARE CERTIFICATE

Ans. Share certificate is a document hat contains the name, address and holdings of an investor in a particular company as a proof of ownership. When an investor buys securities, the share certificate shows that he/she owns the securities and is a par owner (shareholder) in the company.

Qn. WHAT ARE THE MAIN FUNCTIONS OF REGISTRARS

Ans. The functions of Registrar are to create register of shareholders or members of a company and to maintain the register, dividend/interest payment, signature verifications, annual/extraordinary general meetings, coordination. Others include, answering of shareholders enquiries, return of surplus monies and monies for rejected applications in the case of new issues, handling of scrip and right issues.