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Trading, Settlement, Clearing & Registration

Until April 1997, there was a system of physical delivery of stocks. This resulted in long delays between execution and confirmation of ownership. In April 1997, the Central Securities Clearing System (CSCS) was introduced which facilitated the electronic registration of shares and there by eliminated the need for physical certificates. Before transactions are effected, clients need to have opened accounts with their brokers, placed their orders and received confirmation as well as inform their custodians of the impending transaction. (see Sec Trust's Procedures for Buying Shares in Nigeria, for more information)

CSCS Settlement Dates

Day                    Action

---

T-1   Client pre-funds account
T-1   Executive date
T+2   Transfer of net obligations between counterparties
T+5   Registration of ownership in buyer's name

Costs
Transaction costs incorporate brokerage fees, exchange fees and certain taxes. The Stock Exchange provides a guideline for brokers commissions but these are negotiable. The fees to the Exchange and the taxes are not. The 10% Capital Gains Tax has been abolished but a 10% withholding tax remains in place.

Fees Payable (% of Consideration)

Brokerage Fees	Buyer	Seller
Commission	0-2.75	0-2.75
VAT*	5.00	5.00
Regulatory Fees
NSE/CSCS Fee	-	0.50
SEC Fee	1.00	-
Stamp Duty	0.075	0.075
*% of commission

Custody

Custodial services in Nigeria are limited to Stanbic Merchant Bank (an affiliate of Standard Merchant Bank). All arrangements and fees have to be negotiated directly with the custodian. Citibank Nigeria (a subsidiary of Citibank N.A.) is also planning to offer custodian services. SecTrust also offers sub-custodial services to its clients.

Regulation

All restrictions to ownership, domestic or foreign have been removed. Foreign individuals or institutions are allowed to own up to 100% of any company, including banks, although in practice this is virtually unachievable. There is a reporting requirement for transactions involving more than 5% of a company's equity.

Data provided by SecTrust